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What Is Fiduciary Liability Insurance?

Fiduciary liability can protect your company and plan fiduciaries when participants claim mishandling of an employee benefit plan. If you sponsor a retirement or health plan, check who is insured and whether both administration errors and fiduciary-breach claims are addressed. ^5,^1,²

What Does Fiduciary Liability Insurance Cover?

A dispute over enrollment records differs from a claim that plan fiduciaries mishandled investments; your quote needs to address the risks your role creates. ²

Fiduciary liability insurance can help your organization respond to covered claims alleging breaches of duties in managing employee benefit plans. ^5,¹

People, Organizations and Plans

Check which people, sponsoring organizations and benefit plans the quote insures. ²

Describe what each person does for the plan; a job title alone does not determine fiduciary status. ²

Administration and Fiduciary Responsibilities

Plan administration includes enrollment, records and communications. An error in an enrollment record isn't the same allegation as a breach of duty over investment decisions. A fiduciary proposal should explain how it treats both administrative mistakes and alleged fiduciary breaches. ²

Topic	Ask the insurer
Plan and sponsor	Are your benefit plan and sponsoring organization insured?
People with plan responsibilities	Which people fall within the policy’s insured definitions?
Enrollment, records and communications	How does the policy treat administration errors?
Alleged fiduciary breach	Which duties and claims does the policy address?

² ²

Who Needs Fiduciary Liability Insurance?

Consider fiduciary liability if your business sponsors employee benefit plans and your people make decisions or handle administration for them. ⁴

Fiduciary Liability Insurance Coverage Examples

What happened

Employees Challenge Plan Decisions

Employees allege that the people managing their benefit plan mishandled its investments.

How coverage may help

Fiduciary liability may cover defense and covered losses from a breach-of-duty claim. The plan, sponsoring organization and people involved need to be insured. ^5,^1,^2,⁴

What happened

An Enrollment Mistake Leaves a Gap

An employee says an enrollment mistake left them without an expected benefit.

How coverage may help

Benefits-administration coverage may address liability for the mistake. That doesn't mean the policy will pay benefits the plan already owes. ^5,^1,²

How Do You Compare Fiduciary Liability Insurance Coverage and Costs?

Defense Expenses and the Limit

Compare how defense expenses affect the liability limit and what amount your business pays through a retention. ^2,⁴ Confirm how and when you must notify the insurer and get consent before committing to defense expenses or a settlement. ³

What Exclusions and Conditions Should You Check in Fiduciary Liability Insurance?

Claims, Earlier Problems and Reporting

Ask when you must make and report a claim and how prior proceedings, known problems and earlier notices affect coverage. ^2,³

Benefits Owed and Liability Claims

Ask how the policy distinguishes a covered liability claim from benefits your plan owes. ²

Misconduct Exclusions

Review how exclusions for intentional misconduct apply and whether defense expenses are treated differently. ² A fidelity bond for dishonest handling of plan assets and liability insurance for fiduciary-breach claims address different exposures. ¹

What Do You Need for Fiduciary Liability Insurance Quotes?

Prepare a list of benefit plans, plan types and assets, participant information, investment-decision arrangements and past claims or known disputes. ⁴

Fiduciary Liability Insurance: Key Terms in Plain English

Fiduciary Liability

Protection for covered allegations about duties in managing employee benefit plans. ^5,¹

Fidelity Bond

Protection for dishonest handling of plan assets, a different exposure from a fiduciary-breach claim. ¹

Fiduciary Liability Insurance: A Policy Example to Compare

See Corgi's guide for an example of one provider's coverage terms and optional extensions.

Frequently Asked Questions About Fiduciary Liability Insurance

Is Fiduciary Liability the Same as a Fidelity Bond?

No. Fiduciary liability addresses covered breach-of-duty claims. A fidelity bond protects plan assets against dishonest handling. ¹

Does the Policy Pay Benefits That the Plan Owes?

A liability claim and benefits already owed by the plan are treated differently. Confirm how the policy handles the payment at issue. ²

Can Fiduciary Liability Insurance Address Benefit Enrollment Errors?

Ask how the policy handles errors in enrollment, benefit records and communications. Those administrative tasks need to be checked alongside protection for alleged breaches of fiduciary duties. ²

Who Is Insured Under a Fiduciary Liability Policy?

Check the definitions for insured people, the sponsoring organization and the benefit plans. The quote should identify which of those parties receive protection. ²

Which Insurance Providers Offer Fiduciary Liability Insurance?

Sources for Fiduciary Liability Insurance

Field Assistance Bulletin No. 2008-04: Guidance Regarding ERISA Fidelity Bonding Requirements. U.S. Department of Labor, Employee Benefits Security Administration; Q2 pp.2–3. Version: November 25, 2008. Accessed 2026-09-16.
Fiduciary Liability. Travelers Casualty and Surety Company of America; II.D,J–L pp.2–3; II.A p.1; II.V p.5; Header p.1; II.M p.3; I p.1; III.A.6–8 pp.5–6; II.M.2 p.3; III.B.1 p.6. Version: FRI-3001 Ed. 01-09. Accessed 2026-09-16.
Liability General Terms, Conditions and Limitations. Travelers Casualty and Surety Company of America; III.F–G p.6. Version: LIA-3001 Ed. 01-09. Accessed 2026-09-16.
Fiduciary Liability Coverage Application. Travelers Casualty and Surety Company of America; Requested Insurance Terms p.2; General and Plan Information pp.1–2; Loss Information p.2. Version: FRI-N-14100 Ed. 09-22. Accessed 2026-09-16.
Fiduciary Liability Insurance. Travelers; What Is Fiduciary Liability Insurance? Accessed 2026-09-16.