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What is Fiduciary Liability? 

Aren’t we covered under our E&O (Fiduciary Liability vs. E&O Breach of Fiduciary Duty)?
As an investment advisor, you have a duty as a Fiduciary to act in the best interest of your clients while providing professional services to them. Professional Liability, or E&O, is designed to protect the firm and its employees in the event that a client sues for actual or alleged negligent acts, errors or omissions committed in the course of providing professional services. Most policies provide broad coverage for claims alleging a breach of fiduciary duty, while others only cover breaches of fiduciary duty for ERISA governed plans.  It is important to be sure all assets are covered for breach of fiduciary duty.
As an employer, you also have a responsibility to your employees to act in their best interest in the management of the benefits you provide them. This is where a Fiduciary Liability policy comes in. ERISA was passed in 1974 to ensure that employees participating in Employee Benefit Plans receive the benefits promised to them. Fiduciary Liability policies are designed to protect employers. A fiduciary Liability policy is designed to cover the firm, as well as the individuals tasked with the management of employee benefit plans, against claims made by employees alleging mismanagement of their benefits. Even if you outsource the management of benefits to an outside vendor, the organization and individuals with the fiduciary duty will likely be named alongside the vendor. 
Fiduciary duty doesn’t only apply to the management of a retirement plan. Claims arising from mismanagement of health insurance, disability benefits, or vacation benefits, to name a few, are also addressed by a Fiduciary Liability policy. Failure to enroll, failure to change beneficiary information, or bad benefits advice are some examples of allegations.
If you are providing benefits to your employees you may want to consider a Fiduciary Liability policy. Give the Financial Institutions Practice Group at Starkweather a call and we can walk you through it.


The FI Group of Starkweather & Shepley Insurance Brokerage, Inc. provides "hands-on" service. We work with you to identify the most appropriate, competitively priced coverage to address your firm's liability needs. The FI team specializes in coverage specific to the Investment Industry.

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