Business | Fiduciary Liability Coverage

In today’s ever-shifting legal environment, employers are increasingly being held accountable for the benefits options they offer employees.
Under the Employee Retirement Income Security Act of 1974 (ERISA), fiduciaries can be held personally liable for losses to a benefit plan
incurred as a result of their alleged errors or omissions or breach of their fiduciary duties.

Lawsuits against a privately owned company, its fiduciaries, and its plans can be brought by a host of parties, including:

  • Plan participants (employees).
  • The government: The Department of Labor and The Pension Benefit Guarantee Corporation.

Fiduciary liability claims can involve a broad range of allegations, such as:

  • Denial or change (especially reduction) of benefits.
  • Administrative error.
  • Improper advice or counsel.
  • Wrongful termination of a plan.
  • Failure to adequately fund a plan.
  • Conflict of interest.
  • Imprudent investment of assets or lack of investment diversity.
  • Imprudent choice of insurance company, mutual fund, or third-party service provider.

By sponsoring a retirement plan, such as a defined contribution plan or 401(k), profit-sharing plan or employee stock option plan (ESOP), defined benefit plan, or welfare plans such as health or accident plans, a private company may need protection against errors in plan administration and breaches of duty under ERISA.

Your Private Company May Need Fiduciary Liability Insurance Because:

    • It fills in gaps in traditional coverage. It is a common misconception that the Employee Benefits Liability (EBL) section of General Liability (GL) insurance or Directors and Officers (D&O) liability insurance will take care of every possible lawsuit against fiduciaries. However, EBL insurance protects against claims of errors in plan administration, but not against the more expensive and complex ERISA violation claims.
    • D&O liability insurance typically excludes claims for both EBL and breach of ERISA fiduciary duty.
    • By accessing the advice of experts and choosing and offering quality, diverse investments, you can mitigate your fiduciary liability exposure, but you can’t eliminate it. Even a company sponsoring only a 401(k) is exposed. Employers are increasingly held liable for the selections they are giving to their employees.

Fiduciaries without fiduciary liability insurance may be forced to pay for lawsuit defense costs, judgments, and settlements out of their own pockets.


I have worked with various individuals at Petschauer and have found each to be responsive, courteous, and thoughtful. Each year, the contact for my auto policy proactively seeks new bids and has consistently saved me money on my policy.
Ryan Huber
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Spence-Chapin has had the pleasure of working with the wonderful John Petschauer, Inc. for 15+ years. They have always provided excellent service to us–with great knowledge, expertise, and patience — even in the most challenging situations. There has not been one time when they have not been immediately accessible to us, even at a moment’s notice. We thank them for their work and celebrate their 60th anniversary, while looking forward to working with them for another 60 years and beyond!
Petschauer is great. I never had a problem.  They always call me back. Fabulous employees who are always willing to help.
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My family and I are long time personal and business clients of Petschauer Insurance. We sincerely appreciate your responsiveness and the quality of service that Petschauer provides. We have recommended your company to others because of our satisfaction with your service. We look forward to doing business with you for years to come.
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From the first time I spoke with Lori Halloran at Petschauer Insurance, I knew she was a special person. She is a woman that conducts herself professionally, with compassion and full knowledge of all types of insurance Petschauer has to offer. While speaking with her, as she explained and answered all of my questions, I felt like I was speaking with family…which is another way to describe this company. She has a way of making very confusing decisions so simple and easy to understand. I even added another insurance policy to my two renewal policies because of her. My last renewals could have been processed via mail but I really wanted to take the time to drive and meet this wonderful woman face to face. She greeted me with this huge beautiful smile, which matched her personality perfectly. So, I just had to go back another time just to say “Hi” and bring her flowers in appreciation for all her help and also celebrate a new friendship. The Petschauer “Family” has been there for me since my first policy when I was 19 years old, and now I’m a “senior”. I’ve been with them forever and don’t plan on going anywhere else. Thank you Lori for your dedication and to the rest of the Petschauer staff.
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I have been with Petschauer Insurance for over twenty five years. The staff is knowledgeable and professional. Petschauer writes both my personal and commercial insurance and they provide excellent counseling. I truly trust the firm and their staff. Thank you.
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Stephen Kennard from Canard Inc.
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Vincent Falcone