Get A Fidelity Bond
An ERISA Fidelity Bond protects the plan assets against fraud. Not having an ERISA Fidelity Bond can subject even the smallest of plans to a costly annual audit. The bond must be no less than 10% of assets or a minimum of $1,000. The maximum required bond amount is $500,000, although there are some exceptions where the maximum may be higher when employer stock or non-qualifying assets are held.
You can usually purchase an ERISA Fidelity Bond through your company’s property insurance agent.
Colonial Surety provides ERISA Fidelity Bonds online without having to complete a time-consuming application.
An example of an ERISA Fidelity Bond quote is as follows:
|Your Premium Rates|
|Bond Description||Bond Amount||Premium|
|ERISA – Qualifying One Year||$100,000.00||$214.54|
|ERISA – Qualifying Five Year with Ext. Coverage||$100,000.00||$531.35|
Your best protection against lawsuits
Under ERISA, fiduciaries, (plan sponsors, owners or officers), who make decisions about the company’s employee benefit plans may be held personally liable for breach of their responsibilities in the administration or handling of employee benefit plans.
Many plan sponsors believe incorrectly that the ERISA/Fidelity bond protects their personal assets. Fidelity bonds provide coverage for dishonest situations, but only for the benefit of the plan and the plan beneficiaries. Fidelity bonds don’t protect the trustees themselves from liability claims and is thus completely distinct from fiduciary liability insurance.
Fiduciary Liability Insurance protects plan sponsors and trustees from defense cost and penalties if they are sued for fiduciary decisions they make for an employee benefit plan. Fiduciary Liability Insurance is strongly recommended if you are a plan sponsor of an employee benefit plan because your personal assets are at risk!
This type of insurance is not required.
An example of a Fidelity Bond quote is as follows:
|Fiduciary Endorsement Liability Rate 250,000 Limit||$250,000||$562.50|
|Fiduciary Endorsement Liability Rate 500,000 Limit||$500,000||$759.38|
|Fiduciary Endorsement Liability Rate 1,000,000 Limit||$1,000,000||$928.13|