Managing a business’ benefits department, packages and assessments is a complicated task. The chances of making an error can happen in many different ways including mishandling plan records and not making good investment decisions. Here are some common fiduciary liability insurance claim examples.
Improper Plan Disclosure
The company moves to a new administrator and issues a blackout period. However, they fail to notify the plan’s retirees not allowing them to move their funds. They file suit against the company for improper disclosure.
Delayed 401(K) Balance Transfer
During the annual 401(K) plan renewal, an employee requests a balance transfer that is then delayed. They claim a loss of investment and blame the plan administrator.
Errors and Omissions
An employee asks for a pension calculation only to discover there was a miscalculation in his plan benefits based on delayed information. The stock market drops and the plan loses money, so the employee files a claim of negligence.
Faulty Counsel or Advice
Planning to retire, an employee asks for more information on their plan benefits. If they discover they never enrolled in the 401(K) offered, they can sue the company for failure to advise them on the plan.
These fiduciary liability insurance claim examples show why having fiduciary liability insurance is so important for businesses. Protecting the personal assets of fiduciaries is an effective tool for transferring risk for companies.