Fiduciary Liability
Personal protection for whoever administers your organization's retirement or benefit plan.
This is an estimate, not a bound policy — a licensed VAB producer confirms final terms before coverage starts. Sgt. Savings can answer questions but can't quote, bind, or guarantee coverage.
Fiduciary Liability covers claims that someone breached their duty as a fiduciary of your organization's employee benefit plan — a 401(k), health plan, or similar benefit program. Anyone who selects investment options, approves plan changes, or otherwise exercises discretion over a benefit plan is a fiduciary under federal law, and that role carries personal financial exposure. This policy protects the individuals who carry that responsibility, and the organization that sponsors the plan.
Who This Is Really For
The ideal buyer.
The ideal buyer is an HR or finance leader who just realized they're personally a fiduciary under federal law without ever having the word appear in their job title — often the trigger is switching 401(k) providers, changing the investment lineup, or discovering a contribution was funded late. This buyer has usually assumed that sitting on a benefits committee was an administrative task, not a legal role carrying personal financial exposure, and Board & Executive Liability doesn't reach it because fiduciary duty under ERISA is its own distinct exposure. What fits them here is coverage built specifically around benefit-plan fiduciary duty — protecting the individuals who actually exercise discretion over the plan, not just the organization that sponsors it, regardless of whether that organization is a business or a nonprofit.
- Any organization sponsoring a 401(k), pension, or other retirement plan
- Organizations offering group health or welfare benefit plans
- HR leaders and finance executives who sit on a benefits or investment committee
- Nonprofits and businesses alike — the fiduciary duty applies regardless of tax status
- Organizations that have recently changed retirement-plan providers or investment lineups
- Any organization that has failed to fund a required plan contribution on time
What It Covers
Coverage, broken down.
Breach of fiduciary duty
Covers claims that a fiduciary breached the duty owed to a scheduled employee benefit plan under ERISA or similar law — through a bad investment decision, excessive fees, or a failure to monitor the plan properly.
Personal protection for plan administrators
Responds on behalf of the individuals who exercise discretion over the plan — benefits committee members, HR leaders, and executives — not just the organization.
Defense costs for benefits-due and funding disputes
Even where the underlying benefit-payment dispute itself isn't a covered loss, defense costs for that dispute are carved back and paid.
Illustrative Scenario — How This Coverage Responds
Illustrative scenario — a claim over high-fee investment options
An organization's 401(k) plan participants file a claim alleging the benefits committee kept underperforming, high-fee investment funds on the plan menu for years without reviewing alternatives, breaching its duty to act in participants' best interest. The individuals on that committee — often HR and finance staff, not just senior executives — are named personally. Fiduciary Liability funds their defense and responds to a covered settlement or judgment.
Illustrative example for education only — not a claim outcome or a promise of payment. Every claim depends on the actual policy issued and its terms.
More Than One Way In
More scenarios.
Real coverage doesn't fit one story. Here's who else this shows up for.
The plan-provider transition
An organization switches 401(k) recordkeepers and moves the entire investment lineup to a new provider. The benefits committee wants confirmation it's protected during the transition, when errors between the old and new provider's data are most likely to surface.
The late contribution
A fast-growing business discovers, during a routine audit, that a payroll timing issue caused a required plan contribution to be funded a few weeks late. The committee wants to understand its personal exposure and what the policy actually responds to in that situation.
The self-funded health plan committee
HR leaders sitting on a committee overseeing a self-funded group health plan realize they carry the same fiduciary duty as the people managing the company's 401(k), and ask whether their existing coverage was ever scoped to include the health plan too.
Know The Gaps
What this doesn't cover.
Every policy has limits. Knowing them before you buy is how you avoid a denied claim later.
Employment-related acts
A hiring, firing, or discrimination dispute belongs on Employment Practices Liability, not here — the two coverages are scoped to different exposures.
Settlor acts — decisions to establish, amend, or terminate a plan
The decision to create or end a benefit plan is treated as a business decision, not a fiduciary act — that distinction matters when a claim is being evaluated.
Benefits actually due, failure to fund, or return of contributions (defense costs only carved back)
This isn't a funding backstop — it won't pay the benefits themselves if a plan was underfunded, though it will fund the legal defense of that dispute.
Contractual liability beyond what the fiduciary would owe anyway
Extra obligations your organization agreed to by contract, on top of ordinary fiduciary duty, generally aren't picked up here.
Dishonest or criminal acts, once finally adjudicated
Same rule as the rest of this policy family — it's the final adjudication of dishonesty that ends coverage, not the accusation.
Punitive damages, where state law makes them uninsurable
This is a legal limit on what any insurer can pay, not a VAB-specific carve-out.
Behind The Quote
What goes into the decision.
What actually moves your price and your approval — no black box.
Plan type and participant count
A 401(k), pension, or health/welfare plan each carries its own fiduciary duty profile, and a larger participant count generally means a larger potential claim if a breach is alleged — both shape how the policy is structured.
Recent plan changes
Switching recordkeepers, changing the investment menu, or restructuring plan design are the moments underwriting pays closest attention to, since data-transfer errors and documentation gaps concentrate around transitions.
Contribution funding timeliness
A documented history of funding required contributions on schedule is a meaningful positive signal — a late-funding incident doesn't automatically bar coverage, but it needs to be disclosed accurately.
Committee governance and documentation practice
Regular, documented review of investment options and fees is the practical evidence that a committee met its duty — underwriting and, later, any claim defense both benefit from that paper trail existing.
Let's get you covered.
Tell us what you need on Fiduciary Liability — a licensed VAB advisor follows up personally. No bots, no runaround.
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Availability
Available nationwide, with policy terms adjusted to each state's requirements.
Questions, answered straight
No jargon on fiduciary liability — just what you're actually asking.
Anyone who exercises discretion over your benefit plan — selecting investment options, approving plan design changes, or managing plan assets — is a fiduciary under federal law, whether or not "fiduciary" is in their job title.
Both — this policy covers breach-of-duty claims tied to any scheduled employee benefit plan, retirement or welfare/health.
No — it won't pay the benefits or contributions themselves, but it does fund the legal defense of a dispute over that funding.
Yes — fiduciary duty under ERISA and similar law applies regardless of your organization's tax status. Any nonprofit sponsoring a retirement or benefit plan carries this exposure.
No — Fiduciary Liability is a separate coverage part from board and executive governance protection, even though all three (Board & Executive, Employment Practices, and Fiduciary) are often carried together under one program.
Disputes over investment-option fees and performance, failure to timely fund a required contribution, and plan-administration errors are the most common triggers — regular committee review and documentation are the best practical defense.
Beyond This Coverage
What people in your situation also need.
Group Benefits
Fiduciary exposure follows the benefit plan itself — an organization sourcing group benefits through VAB gets the plan administration and the coverage that protects the people who oversee it in one place.
ExplorePayroll
Contribution-timeliness issues, one of the most common fiduciary claim triggers, usually trace back to payroll processing — keeping the two connected reduces that risk.
ExploreHR & Payroll (PEO)
A PEO relationship often takes on day-to-day benefit-plan administration, which pairs naturally with protecting the committee members who retain fiduciary responsibility.
ExploreRelated Coverage
Coverage people pair with this.
Board & Executive Liability
Protection for the people who make the calls at the top — directors, officers, trustees, and volunteers.
Learn moreEmployment Practices Liability
Coverage for the claims that come from how you hire, manage, and let people go.
Learn moreLabor Union Liability Coverage
Protection for union officials and the union itself against claims tied to how the union is run.
Learn moreReady to talk it through?
Get a quote in minutes, or ask Sgt. Savings a straight question first — no pressure, no runaround.
Insurance products described on this page are marketed by The Veteran Alliance, a licensed insurance producer, and underwritten by one or more separately licensed insurance companies, which may include Corgi Insurance Company and its affiliates. The insurer that actually underwrites your policy, its licensing status in your state, and any state-required notices will be identified in your quote and policy documents. Coverage, limits, eligibility, and pricing are determined by the underwriting insurer, may vary by state, and may change. Nothing on this page is a quote, an offer of insurance, a binder, or a guarantee of coverage — coverage takes effect only when a policy is issued.