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The US Supreme court recently ruled that a participant in a defined contribution plan could bring an action against his employer to recover losses in connection with a drop in the values of his 401(k) retirement plan. The court held that the administrators and sponsors of the plan could be held liable for a breach of Fiduciary Duty relating to loss suffered by the plan.
You can protect yourself and your business from this exposure by purchasing Fiduciary Liability. This coverage will respond when an employee brings a lawsuit against you due to an alleged underperformance of his or her retirement plan. The premium is based on the size of the plan and the minimum premium is around $1,000.
Please note: J. Michael Low is a former AZ Director of Insurance, and is the founding partner and an attorney with Low & Childers, PC of Phoenix, AZ. He is still practicing full time and has agreed to help Low & Johnson on certain coverage and claims issues relating to insurance. He is not issuing legal opinions or legal advice on behalf of Low & Childers. Mr. Low is a licensed property and casualty producer in the state of Arizona.
Any questions please give me a call or e-mail. Also, we keep the insurance tips newsletter an various topical insurance issued posted on the Low & Johnson web site www.lowjohnson.com.