We commonly think of a “fiduciary” as someone who has a managerial role in an employee benefit plan, or as the trustee of a private trust. So far, so good. Those people are often fiduciaries.
The word has a pedigree that dates much farther back than the enactment of the Employee Retirement Income Security Act (ERISA). It is an offshoot of the Latin word “fiducia,” meaning trust or reliability. In Roman times it described the duties owed between a father and the rest of the family, between allies and between other relationships. Today, we might translate the idea as “I've got your back,” if said sincerely.
In risk management and insurance, we look to fiduciary liability policies to protect against ERISA exposure, and directors and officers (D&O) liability policies as financial bulwarks against claims alleging breaches of similar duties in a corporate setting. As well established as such products are, fiduciary liability is still an underrated risk.
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