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Who Needs to Carry Fiduciary Liability Insurance?

The Department of Labor (DOL) caused a stir recently as the deadline approached for changing the rules under ERISA about the definition of fiduciary.

By Diana B. Reitz, CPCU | Updated on October 31, 2011

The Department of Labor (DOL) caused a stir recently as the deadline approached for changing the rules under ERISA about the definition of “fiduciary.” Although the DOL change, as well as possible action by the Securities and Exchange Commission, has been tabled, the question remains: Just who qualifies as a fiduciary and who needs to carry fiduciary liability insurance?

This question frequently comes up when agents are conducting exposure reviews with commercial clients and prospects. Businesses that offer employee benefits and retirement accounts are charged with being sure employee premiums and investments, as well as funding promised by the employer, are dutifully handled and invested. They owe a fiduciary duty to handle those funds properly, with the best interest of the employee in mind. But does that make these employers fiduciaries in the strictest sense?

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