Those who are in positions of management over employee benefits packages are called fiduciaries, and with great power comes great responsibility. The nature of their job duty opens them up to lawsuits and legal claims, which can be detrimental to both the employee and the entire company. Regardless of how big your company may be, the team at Axis Insurance highly recommends adding on fiduciary insurance to your current policy package.
Common Areas of Claims
For those who work as fiduciaries, there are some common areas of fiduciary insurance claims. The insurance plan is to protect from the financial loss that accompanies both founded or unfounded claims, and the coverage would be applicable in the following settings.
- An employer relied on a third-party company to manage investment funds, but the third-party was caught skimming funds from the top of employee contributions. The employer can be held liable for the funds that were taken and the funds associated with lost investment opportunities.
- An employee wanted to transfer certain investment funds out of a risky venture. The fiduciary delayed the transfer, and in the meantime, the venture imploded and the investment was worthless. The fiduciary can be held liable for the financial damages.
There are many scenarios that could be explored since there are several areas of control with fiduciary duties. These challenges can be mitigated with a strong insurance plan in place.