Fiduciary vs ERISA Fidelity

The question came up yesterday when I was discussing the need for fiduciary liability coverage, “Do we need that plus the fidelity bond?”

ERISA is the federal law that governs employee benefit and welfare plans.  I makes administrators of plans personally liable for mistakes.  That’s what fiduciary covers – think of it as errors and ommissions for employee benefit plans.

The ERISA bond is fidelity insurance.  It is coverage required by ERISA for theft or loss of the funds in a pension or other welfare plan.  Most often an employee dishonesty policy is used with an endorcement broadening out the coverage to meet ERISA.