Fiduciary Liability Insurance – Transparency and Choice for Governmental Benefit Plans
Many governmental employee benefit plans today remain uninsured because plan administrators often believe that fiduciary liability insurance is not needed. Yet other plans unsuspectingly purchase insurance that does not provide full coverage. Euclid Specialty, a leader in fiduciary liability insurance for governmental plans, has a better approach. We offer transparency and choices in fiduciary liability coverage.
Trustees of Governmental Benefit Plans Need Fiduciary Liability Insurance. Some key points for Trustees:
- Sovereign Immunity is Limited
- The Scope of Indemnification by Governmental Entities is Limited and Often Discretionary
- Governmental trustees have personal fiduciary liability exposure
The best and only reliable way to protect against personal liability is through the purchase of fiduciary liability insurance. Nearly half of the states expressly authorize the board of trustees or its equivalent to purchase fiduciary liability insurance for plan trustees, officers, agents and employees. But even in states in which fiduciary liability insurance is not specifically mentioned in state statutes, nothing prohibits a plan from purchasing insurance to protect its trustees.
Do You Have the Coverage You Want?
The typical fiduciary liability insurance policy for governmental plans limits coverage to situations in which governmental immunity does not apply. Many plans do not understand they are purchasing limited coverage.
The Euclid Approach: Transparency and Choices.
Euclid Specialty has a better approach for governmental fiduciary insurance. We provide options and transparency based on the level of indemnification available to fiduciaries. Our three-tier coverage and rating model provides options:
- Option 1 – Full coverage approach – this approach provides full coverage irrespective of whether governmental indemnification or sovereign immunity applies. We can also offer full settlor coverage, as well as a defense limit for non-fiduciary claims, for qualified plans.
- Option 2 – Non-Indemnifiable approach – a more limited and less expensive approach is also offered that matches typical coverage offered by most carriers. This policy responds only if the loss is non-indemnifiable, thus a less expensive option for the plan.
- Option 3 – We also offer “A side” coverage which covers only individual trustees when sued for breach of fiduciary duty. Typically available only in D&O insurance policies, Euclid has introduced
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