Which type of liability insurance is necessary to cover claims arising under the Employee Retirement Income Security Act of 1974 (ERISA)?

Fiduciary Liability insurance is specifically designed to protect employers and fiduciaries from claims that may arise under the Employee Retirement Income Security Act of 1974 (ERISA). ERISA sets minimum standards for pension plans and other employee benefit plans in private industry, emphasizing the responsibility of fiduciaries to act in the best interest of plan participants and beneficiaries.

This type of insurance is critical because it provides coverage for breaches of fiduciary duty as defined by ERISA. These breaches can include the mismanagement of plan assets, improper disclosure of plan information, or any act that is deemed not to be in the best interest of the plan participants. By having Fiduciary Liability insurance, employers and plan sponsors safeguard themselves against legal claims that could arise from their fiduciary responsibilities, thereby ensuring they remain compliant and protected financially.

The other options do not specifically address the unique liabilities related to fiduciary duties under ERISA. General Liability typically covers general business operations rather than specific fiduciary responsibilities. Errors and Omissions insurance is more aligned with professional malpractice and mistakes in service delivery, and Workers Compensation pertains to employee injuries and workplace incidents rather than the management of retirement plans or benefits.