October 20, 2016

Have you ever heard the saying “no good deed goes unpunished”? At United Insurance, experience has taught us time and again, it doesn’t matter how noble your intentions–it’s always possible to create liabilities, some of which you may have never considered.

Now, as a business owner, you recognize the importance of financially secure employees. That’s why you provide a benefit package. Unfortunately, if these benefits are mismanaged, you may be held personally liable for losses. While this might be hard to believe, it’s in every fiduciary’s best interest to protect themselves.

The Employee Retirement Income Security Act of 1974 (ERISA) is intended to protect employees and their assets. It defines a fiduciary as any individual or organization with management control of employee benefits. These benefits include pensions, savings, profit-sharing plans, and health plans. Even if management of these plans is outsourced to a third party–accountants, consultants, law firms, or financial institutions–it is still possible for business owners to be held professionally and personally liable if the benefits depreciate in value due to mismanagement.

United Insurance offers a range of products aimed to support and protect fiduciaries from liability. These products include Employee Benefit Liability (EBL) insurance, Fiduciary Bonds, and Fiduciary Liability insurance. Each serves to offset the risk of losses generated through mismanagement.

Fidelity Bonds are required by ERISA, and amount to at least 10% of the plan’s value. They are meant to protect the plan’s assets, but leave many fiduciaries vulnerable to liability. Fiduciary Liability insurance is used to protect fiduciaries against legal claims by plan beneficiaries or government bodies, including the Board of Labor. Finally, EBL insurance covers claims stemming from the administration of the employee benefit plan.

While these products each offer a measure of protection, every business and benefit plan is different. It can be difficult to fully understand the risks of fiduciary responsibility so contact your agent today. We’ll be happy to help you find the best way to cover yourself, your business, and your employees.


At United Insurance, we are life-long learners.  We are committed to educating ourselves and our clients about the latest industry standards, coverage options, and recent changes in the laws. We do this because we don’t just sell insurance; we protect what you value most so we work hard to make sure we provide the right solutions for your unique needs.  Follow the latest news and learn more with us.