Who is your carrier partner?
Zurich American Insurance Company* is our carrier partner. We selected Zurich since we were aligned with them in all aspects of the relationship, from underwriting appetite to streamlining the experience for brokers.
What paper company do you use?
Zurich American Insurance Company (A+ rated paper*). We currently offer admitted paper; we do not quote on surplus lines yet.
What is Fiduciary Liability?
Fiduciary Liability is an insurance policy that provides coverage for individuals who are involved in administering or managing employee benefit plans.
Who is a Fiduciary?
Under the Employee Retirement Income Security Act of 1974 (ERISA), a fiduciary is:
- anyone that is mentioned in the plan document by name or title;
- anyone that exercises discretionary decision-making authority with respect to plan administration or management; or
- anyone who gives investment advice to a plan or its participants.
This may also include “functional fiduciaries,” which are individuals deemed to be a fiduciary by virtue of their actions. For example, the plan sponsor (employer), directors and officers, plan administrator, plan trustee, and internal investment committee members are commonly considered fiduciaries.
What is ERISA?
ERISA is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection to plan participants.
What is a plan?
Employee benefit plans covered by Fiduciary Liability insurance fall into two categories:
- Welfare plans, such as medical, vision, dental, life, and disability plans
- Retirement plans, such as defined benefit pension plans, 401(k) plans, 403(b) plans, Employee Stock Ownership Plans (ESOPs), and stock purchase plans
As a fiduciary, are my personal assets at risk?
Possibly. Section 409 of ERISA explicitly imposes personal liability on plan fiduciaries who violate their fiduciary duties, meaning fiduciaries might have to personally pay for any losses they cause from their personal assets. To compound matters, ERISA also prohibits plans from indemnifying fiduciaries, which means the benefits plan cannot pay for defense costs, awards, or settlements on behalf of a fiduciary.
I have an Employee Benefits Liability policy. Why do I need a Fiduciary Liability policy?
Employee Benefits Liability (EBL) does not provide coverage for ERISA liability. EBL policies provide coverage for errors or omissions in plan administration (e.g., failure to enroll an employee into a plan). A Fiduciary Liability policy covers ERISA liability, as well as errors and omissions in plan administration.
What is an ERISA bond for?
ERISA bonds are a type of surety bond that provides protection for the plan and participants against losses caused by acts of theft or fraud committed by an employee involved in plan administration. Under ERISA Section 412(a), an ERISA bond is required, ensuring that any employee who handles plan funds or property is bonded.
All of our investment decisions and plan administration have been transferred to a third party (investment advisor, trustee, etc.). Do I still have liability?
Yes. As a fiduciary you have the ability to delegate some duties but not liability. Even when using a third party, you still have significant responsibilities including selecting the right third-party service provider who will act in the best interest of your plan participants, monitoring and assessing the performance of both the plan and the third party, and replacing the third party if they are underperforming.
What types of allegations does Fiduciary Liability insurance cover?
Fiduciary Liability insurance covers allegations of ERISA violations and errors and omissions related to plan administration. Common allegations include:
- Wrongful denial of benefits to which an employee is entitled
- Inappropriate investment advice or disclosure
- Lack of diverse investment options or too many investment options
- Conflict of interest regarding investments
- Fiduciaries engaging in prohibited transactions
- Failure to select appropriate third party
- Failure to monitor third party
- Failure to enroll an employee in benefit plan in a timely manner
- Failure to transfer employee contributions in a timely manner
- Excessive fees charged by a third party for investment options
What is the maximum limit you offer?
We offer limits of up to $10M.
What sublimits do you offer?
Subject to underwriting, we offer the following sublimits.
- Section 502(i) penalties - up to $250,000
- Section 502(l) penalties - up to $250,000
- Section 502(c) penalties - up to $250,000
- Pension Protection Act penalties - up to $250,000
- COBRA penalties - up to $250,000
- Section 4975 penalties - up to $250,000
- Health Care Reform Act penalties - up to $250,000
- United Kingdom Pensions penalties - up to $250,000
- HIPAA penalties - up to $1,500,000 (but not greater than policy limit)
Can you write Fiduciary Liability insurance on a standalone basis?
Yes, we can write standalone Fiduciary Liability insurance.
What size risks can you consider?
We consider coverage for private companies and not-for-profits with up to $250M in plan assets.
Will you accept a competitor's application to quote?
Yes, we can use a competitor's application to quote and bind Fiduciary Liability insurance. Upon binding, we require the insured to sign our signature bundle, which confirms the limit, coverage and premium. This is not a warranty statement; rather, it is a confirmation of what they are binding.
Form 5500 Integration
What is the Form 5500?
Form 5500 is filed annually with the US Department of Labor to provide information about benefit plans governed by ERISA, including information on the plan’s qualification, financial condition, investments, and operations.
How is this information used?
Coalition’s application includes some of the information provided by employers on the Form 5500, so we can prefill the application with that data to save brokers time when quoting Fiduciary Liability coverage. Learn more about quoting with the Form 5500 data by watching our short demo video.
How did Coalition get this information?
The Department of Labor makes this information publicly available in its EFAST Search tool.
How often will this data be updated?
Form 5500 is filed annually with the US Department of Labor. Coalition will regularly refresh the data in our system as it’s made available by the Department of Labor.
*Rating as of September 30, 2021. A.M. Best’s Ratings are under continuous review and subject to change and/or affirmation. For the latest Best’s Ratings and Best’s Company Reports (which include Best’s Ratings), visit the A.M. Best website atwww.ambest.com. The rating represents the overall financial status of the individual member companies of Zurich in North America, including Zurich American Insurance Company, and is not a recommendation of the specific policy provisions, rates or practices of each issuing insurance company.
In the United States, insurance products are offered by Coalition Insurance Solutions, Inc. (“CIS”), a licensed insurance producer with its principal place of business in San Francisco, CA (Cal. license #0L76155), acting on behalf of Zurich American Insurance Company, located at 1299 Zurich Way, Schaumburg, IL 60196 (NAIC # 16535). Complete license information for CIS and a list of our admitted carrier partners is available here. Insurance products offered through CIS may not be available in all states. CIS may receive compensation from an insurer or other intermediary in connection with the sale of insurance. All decisions regarding any insurance products, including approval for coverage, premium, commission and fees, will be made solely by the insurer underwriting the insurance under the insurer’s then-current criteria. All insurance products are governed by the terms, conditions, limitations and exclusions set forth in the applicable insurance policy. Please see a copy of your policy for the full terms, conditions and exclusions. Any information on this advertising does not in any way alter, supplement, or amend the terms, conditions, limitations or exclusions of the applicable insurance policy and is intended only as a brief summary of such insurance product. Policy obligations are the sole responsibility of the issuing insurance carrier. Copyright © 2023. All rights reserved. Coalition and the Coalition logo are trademarks of Coalition, Inc. or its affiliates.