Managing corporate risk with insurance protects your bottom line. With so many types of insurance, it can be difficult to know which ones are more suited for your business. D&O insurance is a common type of insurance that covers wrongful acts allegations of board members and directors. Fiduciary responsibility insurance is another type of insurance that protects companies from liabilities when serving as a fiduciary. Here’s why you may need fiduciary liability insurance in addition to your D&O insurance.
What Is Fiduciary Liability Insurance?
A fiduciary takes care of money or assets for other people. If you have a employee pension plan, the person who manages this fund would be the fiduciary. The fiduciary has a duty to the people who have trusted him or her with the money. Fiduciaries can be held personally liable for a breach in those duties. If the fund is mismanaged, both the company and fiduciary may be held responsible for errors or omissions in the administration of the fund. Fiduciary responsibility insurance protects your company if allegations are made, and you must litigate the issue. While D&O insurance generally covers wrongful acts and lawsuits, it may not cover a fiduciary risk. It’s important to discuss this with an agent to know your risks.