Who is covered under fiduciary liability insurance?

Fiduciary liability insurance is designed to protect an organization and its fiduciaries from claims that may arise from their fiduciary duties, especially within the context of employee benefit plans, such as retirement plans and health plans. This type of insurance typically covers the sponsor organization, which includes not just the main entity but also its subsidiaries.

By including the organization itself and its subsidiaries under this coverage, fiduciary liability insurance addresses the potential risks associated with fiduciary decisions made at different levels within the organization structure. This is especially important for ensuring there is financial protection available in cases of legal claims related to breaches of fiduciary obligations, such as mismanagement of assets or failure to act in the best interest of plan participants.

The other groups mentioned, such as only the CEO, external consultants, or only employees, do not encompass the full scope of protection intended by fiduciary liability insurance. The essence of this insurance is to serve as a comprehensive safeguard for the entire organization involved in managing benefits, rather than limiting coverage to specific individuals or roles.