If your company offers a 401(k), health insurance, or any other employee benefit plan, someone is making decisions about how those plans are managed. Those people are fiduciaries under federal law — and ERISA holds them to one of the highest standards of care in American law. Fiduciary Liability insurance protects the people who manage your employee benefit plans against claims that they breached their fiduciary duty. When plan participants sue over excessive fees, enrollment errors, or mismanaged contributions, this is the policy that responds.
Last reviewed April 24, 2026 · Reviewed by the Corgi Insurance team
ERISA doesn't care that you're a startup. If you sponsor a benefit plan, your fiduciaries need protection.
Coverage structure under form CORG-FL-0100. What ERISA requires, what a "Wrongful Act" means for plan fiduciaries, and why this is separate from D&O. Limits shown are illustrative. Important: The coverage descriptions on this page are general summaries for informational purposes only. They do not constitute a policy, binder, or guarantee of coverage. Coverage is provided only under the terms, conditions, exclusions, and limits of the issued policy. Always refer to your actual policy wording and declarations page for the governing terms and conditions. If there is any conflict between this summary and the policy, the policy controls.
Fiduciary Liability
What this policy pays for.
Employees file a class action alleging that the investment options in your company's 401(k) plan charge excessive fees compared to similar funds, and that the plan fiduciaries failed to monitor and negotiate better options.1
Your policy covers claims alleging that plan fiduciaries failed to act prudently in selecting, monitoring, or replacing plan investment options. Defense costs and damages arising from the claim are covered up to the policy limit. Excessive fee litigation is one of the most common fiduciary claims — and it hits companies of all sizes.
Your HR team fails to enroll a new employee in the company health plan during the enrollment window. The employee is diagnosed with a serious illness and has no coverage. She sues the plan fiduciaries for the resulting medical costs.2
When plan administration mistakes — like failing to process enrollment, miscalculating benefits, or providing incorrect plan information — cause harm to a participant, your Fiduciary policy covers the resulting claim. The fiduciaries' defense costs and any damages to the participant are covered.
The DOL (Department of Labor) discovers that your company was depositing employee 401(k) contributions two weeks late each pay period. Affected participants sue the plan fiduciaries for lost investment earnings during the delay.3
Timely deposit of employee contributions is a core ERISA obligation. When fiduciaries fail to deposit salary deferrals promptly and participants suffer investment losses as a result, your policy covers the participants' claims against the fiduciaries. Defense costs and damages are covered.
Scenario notes
Fiduciary Liability is a claims-made policy with defense costs within limits. The claim must be first made during the policy period, and the wrongful act must have occurred after the retroactive date.
Coverage applies to breaches of fiduciary duty under ERISA with respect to covered employee benefit plans listed in the policy declarations. Not all plans qualify — check your declarations page.
DOL investigations, IRS audits, and HHS (Department of Health and Human Services) inquiries are not included in the definition of a covered "Claim" under the standard policy. Investigation costs are not covered. The policy responds when participants or beneficiaries bring a formal claim — not when a government agency investigates. If a DOL investigation leads to a participant lawsuit, the lawsuit is a covered claim; the investigation itself is not.
Policy notes
Settlor acts — decisions about plan design, amendment, establishment, or termination — are excluded. These are corporate business decisions, not fiduciary ones. For example, deciding to reduce employer matching contributions is a settlor act and is not covered. A defense-costs-only endorsement for settlor acts is available — see add-ons below.
Benefits Due claims: defense costs are covered, but the policy does not pay the benefits themselves. A narrow exception exists for benefits that are owed as a personal obligation of an individual fiduciary (not payable from the plan). Refer to your policy for the specific terms of this exception.
Employee stock ownership plans (ESOPs) are excluded from the definition of covered "Plans." Multi-employer plans are also excluded. ESPPs (Employee Stock Purchase Plans) and equity compensation plans are generally not ERISA-covered benefit plans and are unlikely to qualify as covered Plans under this policy. Endorsements for ESOPs and multi-employer plans are available — see add-ons below.
The scenarios above are illustrative examples only and do not guarantee coverage for any specific claim. Actual coverage depends on the facts and circumstances of each claim and the specific terms of your issued policy. Results may differ based on policy endorsements, exclusions, limits, and applicable law.
Fiduciary Liability, D&O, EPLI each respond to a different claim trigger and coverage boundary.
What triggers it: A claim that a plan fiduciary breached their ERISA duty in managing an employee benefit plan Who's protected: Plan fiduciaries — anyone who exercises discretion over plan management, administration, or assets Common scenario: Employees sue over excessive 401(k) fees Key difference: Covers benefit plan management. If the claim is about how a 401(k), health plan, or other ERISA plan was administered, invested, or managed — that's Fiduciary.
What triggers it: A claim that a director or officer made a wrongful management decision Who's protected: Directors, officers, and the company entity for governance decisions Common scenario: Investors sue the board for misleading fundraising statements Key difference: Covers corporate governance. If the claim is about business strategy, capital allocation, or board decisions — that's D&O.
What triggers it: A claim arising from the employment relationship — hiring, firing, workplace conditions, discrimination Who's protected: The company and its managers for employment-related conduct Common scenario: A terminated employee sues for discrimination Key difference: Covers employment practices. If the claim is about hiring, firing, or workplace treatment — that's EPLI.
Wrongful Act — Breach of Prudence Duty responds when employees file a class action alleging that the investment options in your company's 401(k) plan charge excessive fees compared to similar funds, and that the plan fiduciaries failed to monitor and negotiate better options.
Fiduciary Liability is a claims-made policy with defense costs within limits. The claim must be first made during the policy period, and the wrongful act must have occurred after the retroactive date. Coverage applies to breaches of fiduciary duty under ERISA with respect to covered employee benefit plans listed in the policy declarations. Not all plans qualify — check your declarations page.
Available add-ons include HIPAA Civil Penalty Endorsement, ERISA Civil Penalty Endorsement, Voluntary Compliance Endorsement, Settlor Acts Defense Costs Endorsement, ESOP Plan Coverage Endorsement, Administration Error Coverage Endorsement. Endorsements are required where noted and availability may vary by jurisdiction and underwriting.
Extends coverage to civil monetary penalties imposed by HHS (Department of Health and Human Services) for HIPAA (Health Insurance Portability and Accountability Act) violations related to your group health plan. Criminal fines are excluded. For example: HHS imposes a penalty after employee health plan records are disclosed. [Endorsement required]
Covers ERISA Section 502(c), 502(i), and 502(l) civil money penalties — imposed for failures like late filing of Form 5500 (the annual government report for benefit plans), failure to provide required plan documents, and penalties related to prohibited transactions. [Endorsement required]
Covers fees paid to the IRS Employee Plans Compliance Resolution System (EPCRS) or DOL Voluntary Fiduciary Correction Program (VFCP) when your company self-identifies and corrects a plan defect. Covers the correction program fees, not the correction amounts themselves. [Endorsement required]
The standard policy excludes settlor acts (plan design, amendment, termination decisions). This endorsement provides defense costs only — not indemnity — for claims alleging wrongful acts in a settlor capacity. For example: participants sue claiming the company improperly amended their plan benefits. [Endorsement required]
Extends the definition of covered "Plans" to include specifically named employee stock ownership plans (ESOPs). Leveraged ESOP transactions are subject to separate sublimit and underwriting approval. [Endorsement required]
Provides explicit coverage for negligent errors in plan administration — enrollment mistakes, incorrect benefit calculations, and recordkeeping errors. Reinforces coverage for the administrative-error scenarios that drive most small-plan fiduciary claims. [Endorsement required]
Fiduciary attaches to the benefits side of your business. Layer in CGL, Tech E&O, Cyber, EPLI, D&O, and more — modular coverage that grows with your headcount and benefits stack.
Protects your business against third-party claims for bodily injury, property damage, and personal or advertising injury arising from your operations.
Protects against losses and claims resulting from data breaches, cyberattacks, and network security failures.
Covers claims alleging your technology products or services failed to perform as intended, causing financial harm to a client.
Covers claims made against company leaders for alleged wrongful acts in managing the business.
Protects against claims alleging wrongful termination, discrimination, harassment, or other employment-related issues.
Protects your company and plan fiduciaries against claims alleging mismanagement of employee benefit plans, including retirement and health plans.
Protects against claims arising from your published or distributed content, including allegations of defamation, copyright infringement, or invasion of privacy.
Provides liability coverage when employees use rented or personal vehicles for company business.
Key terms from the policy language and approved coverage summary.
Go deeper on fiduciary liability and the rest of the startup benefits stack.
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