What type of insurance protects those managing pension and employee benefit plans against ERISA law violations?

The type of insurance that protects those managing pension and employee benefit plans against violations of the Employee Retirement Income Security Act (ERISA) is known as a fiduciary liability policy. This specialized insurance is designed to cover fiduciaries—individuals or entities that manage and control employee benefit plans—including pension plans.

Fiduciary liability policies address the specific risks associated with the management of these plans, such as breaches of fiduciary duty, mismanagement of funds, and failure to act in the best interests of plan participants. Since violations of ERISA can lead to significant financial penalties and legal liabilities, having this type of coverage is crucial for fiduciaries to safeguard their personal and professional assets.

In contrast, general liability insurance primarily protects against claims related to bodily injury and property damage, which do not encompass ERISA-related fiduciary responsibilities. Automobile liability insurance covers damages arising from vehicle operation, while property damage insurance focuses on losses related to physical property rather than the complex regulatory environment of employee benefit plans. Thus, a fiduciary liability policy is the suitable and necessary insurance type for those managing pension and employee benefit plans under ERISA.