Koosh Insurance · Management Liability

    Fiduciary Liability

    The 401(k) participant who claims the fund lineup was imprudent. The class action over fees the plan committee approved years ago. The DOL investigation that started with one complaint and ended with a consent decree. Fiduciary liability covers the ERISA exposure that every plan sponsor, plan trustee, and plan committee member has — and that most of them don't realize they're carrying personally.

    See what's covered

    Coverage

    What this coverage includes

    • Fiduciary breach claims alleging imprudent investment selection, fee, or administrative decisions
    • Defense costs for ERISA litigation, often the largest cost driver
    • Voluntary settlement program (VFCP) costs — DOL voluntary correction submissions
    • Settlor function defense in some forms — claims related to plan design and amendments
    • Cyber and HIPAA defense for benefits plan data breaches
    • DOL audit defense costs in many forms
    • Penalties under ERISA Section 502(c) in many forms

    Who Buys This

    Who typically buys this coverage

    • Plan sponsors — any company sponsoring a 401(k), pension, or welfare benefit plan
    • Plan trustees and named fiduciaries in their personal capacity
    • Plan investment committees and administrative committees
    • Multi-employer plans under joint trustee arrangement
    • Health and welfare plan committees with fiduciary responsibility
    • Union and Taft-Hartley plans
    • Nonprofit and association-sponsored plans

    Why Koosh

    Why Koosh Insurance

    Fiduciary liability is one of the most under-bought coverages in commercial insurance. ERISA's exposure is broad, the litigation is expensive, and the personal liability for committee members is real.

    Limit sizing to plan assets and participant count — both drive exposure.

    Settlor function and sponsor coverage — coverage for plan-design decisions, not just operational fiduciary acts.

    DOL and IRS correction program coverage — voluntary correction is the cheapest claim resolution and we make sure the policy pays for it.

    Coordination with D&O and EPL — fiduciary, employment, and management liability claims often arrive together.

    Bond plus fiduciary coordination — the ERISA bond and fiduciary policy together, structured correctly.

    Health and welfare plan structure — H&W fiduciary exposure is increasingly litigated, and we structure for it.

    FAQ

    Frequently asked questions

    No — Section 410 specifically prohibits clauses that would relieve fiduciaries of liability. Fiduciary breach claims attach to the individual personally. Indemnification by the plan sponsor is permitted but the sponsor may not have the assets, may itself be insolvent, or may be the source of the claim. Personal exposure is real.

    ERISA Section 412 requires a fidelity bond covering plan funds against theft and dishonesty — this is mandatory for most plans. Fiduciary liability is separate and discretionary, covering breach of fiduciary duty rather than theft. Both are needed; one is required by law, the other by prudence.

    Voluntary correction submissions to the DOL (under VFCP) and IRS (under EPCRS) are often covered by fiduciary liability policies — the policy pays both the cost of the correction submission and any resulting penalties. Coverage for self-correction varies.

    $1M to $5M is common for plans under $50M in assets; larger plans typically carry $5M-$25M+. Defense costs alone in a fiduciary class action can exceed $1M, which is why even small plans should consider this coverage.

    Yes — participant-initiated breach claims, class actions, and individual ERISA Section 502(a) lawsuits are covered. These are the most common claim type and usually the most expensive.

    The broker typically carries their own E&O. Your fiduciary policy covers the plan sponsor and its committee members. The two policies coordinate — but neither replaces the other.

    Related

    Related services

    Directors & Officers (D&O)

    Protection for executives and board members against management decisions.

    Employment Practices Liability (EPL)

    Wrongful termination, discrimination, harassment claims.

    Cyber Liability

    Cyber threats, data breaches, ransomware, and network security incidents.

    This page provides general information about Fiduciary Liability insurance and is not a substitute for tailored advice from a licensed insurance broker. Coverage availability, terms, exclusions, and pricing depend on your specific business operations, location, claims history, and carrier underwriting. Contact a Koosh Insurance broker for a personalized consultation. Koosh Insurance — License #L135215.

    Get a quote for Fiduciary Liability

    Talk to a licensed Koosh broker. We'll review your specific situation, source quotes from appropriate carriers, and walk you through the coverage that actually fits your business.

    (954) 309-3900
    service@koosh-ins.com
    4491 S State Rd 7, Suite 202, Davie, FL 33314