Commonly ERISA bonds are confused with fiduciary liability insurance. There are several differences between the two. Unlike ERISA bonds, fiduciary liability insurance is not required by ERISA. Furthermore, fiduciary liability insurance covers legal liability and expenses. Unintentional errors, omissions and neglect of fiduciary responsibilities are covered. Fiduciary liability insurance covers the trustees of the plan whereas ERISA fidelity bond insures the people who “handle” the plan’s assets, including the trustees.
In addition to being required by law, it is in your best interest to obtain an ERISA fidelity bond to protect your plan from fraudulent actions. Each fiduciary is jointly and severally liable; meaning that each fiduciary is liable for their own, as well as, the actions of all the other fiduciaries.
You can get a fidelity bond from your insurance agent, or you can obtain one from our partner, Surety Solutions.