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Fiduciary Liability Insurance

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Fiduciary liability insurance provided by Cowell James Forge Insurance Group.

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Every growing business should consider getting fiduciary liability insurance as the employee benefits plan in a business is a complicated process despite it being crucial for its success. Having fiduciary liability insurance coverage will help with the following.

  • Coverage of the legal fees associated with claims from clients
  • Offer peace and stability to the employees, making it easy for them to concentrate on their work


By definition, fiduciary liability refers to a policy that protects business parties and plans participants from legal claims arising from mishandlings in the process of calculating the employee benefit plans. Its history dates back to the mid-1970s, and it generally covers fiduciary liability and employee benefits liability areas in a business.

According to the Employee Retirement Income Security Act of 1974 (ERISA), anyone involved in the employee benefits decision-making process is considered a fiduciary. This includes the employers, plan trustees, directors, and officers in a business and internal investors committee.

Fiduciary Breaches Covered by the Policy

  • Denial or wrongful change in benefits
  • Incorrect benefits due to inadequate counseling during administration.
  • Administration errors resulting in improper enrollment or termination of benefits
  • Poor advice to employees wishing to invest in retirement plans


The plan only covers the internal team involved in the fiduciary roles: the insured company and its employees. Therefore, any other third party in the employee benefits committee must secure their coverage.

Equally important, keep in mind that even if you hire outsiders to carry out the fiduciary duties on your behalf, the plan still holds you accountable and may charge you should any bleaching occur.

Why Your Business Must Acquire the Policy

Though not a legal requirement by ERISA or any other federal statute, every business offering benefits to its employees must have this policy for the following reasons.

Benefit-Related Lawsuits Are Expensive

Being fiduciary puts you in demanding responsibilities that, if mishandled, may see you face costly legal claims. Defending the above charges in court is super expensive and may result in you losing your business or valuable assets. Also, the chances of losing in these cases are incredibly high.

Unlike other policies, this plan offers comprehensive protection against imprudent investment claims, administrative errors, legal defense, amongst others.

The amount you choose determines your coverage limit, and it’s always good to engage with a trusted insurance agent before making any decision.

Employee Benefit Plans Are Complex

Making mistakes is high regardless of how competent you are due to the complexity involved in the employee benefit plans. Additionally, some workers will sue you for no proven reason, and proving your innocence in such cases is never easy.

Moreover, note that if you left the work to a third party and mistakes took place leading to a lawsuit, you will still be held accountable as the overseer of the entire fiduciary role process. This leaves you with no option but to get coverage early in advance to protect you and your employees.

Helps Increase Business Productivity

Your employees will be at peace and able to work comfortably knowing that their interests are well handled. Moreover, such insurance coverage will reduce the never-ending misunderstandings that waste time and bear hatred in a work environment.

Getting coverage is a sure proof of your best interest to your workers, and this will have them remain loyal to you and work extra hard to get the business to the next level.

Protects Against Personal Liability

The Employee Retirement Income Security Act of 1974 (ERISA) holds any fiduciary in a business personally liable for any mismanagement of the employee benefit plans. This puts you at risk of paying all the damages and expenses resulting from such a claim out of your pocket.

With the cases of benefit-related lawsuits rising at an alarming rate today, it’s essential to take the protection and get protection for your business.

Cost of Fiduciary Liability Insurance Coverage

Certain factors such as the amount you pay, the quotes offered by the insurance company of your choice, the size of your business in terms of the number of employees, and the type of benefits you offer, will determine your fiduciary insurance package.

Fiduciary Liability Insurance Kansas City

There are hundreds of insurance companies offering fidelity insurance packages in Kansas City. To get the best quotes, you will endeavor in comprehensive research and compare different quotes from various companies.

Cowell James Forge Insurance Group is one of the best insurance companies offering the best quotes in the fiduciary liability package in Kansas City. Consider getting in touch with them through their website or their ever available insurance agents.

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