News coverage of failed pension plans and the resulting Pension Protection Act brought the once seldom-used fiduciary liability insurance to the forefront. It has become an important management liability product–a must-have coverage for companies of all sizes seeking to protect their executives.
But many questions still remain about who these policies cover, and why companies need coverage for this liability.
The quick answer is that fiduciary liability helps protect executives who may be found personally liable for losses to a company-administered benefit plan that resulted from their failure to act in the best interests of benefit plan participants. But as with many issues requiring government intervention, the issue is more complex.
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