Why ERISA Bonds Are Required
ERISA stands for Employee Retirement Income Security Act, which is a set of rules administered by the U.S. Department of Labor to protect employee savings funds. ERISA requires that any company handling employee benefits plan funds must be covered by a fidelity bond, known as an ERISA bond.
The ERISA bond protects employee benefits plan funds from acts of fraud or dishonesty. Note that this bond protects the employee benefit plan, not the individuals who handle such funds on behalf of their employer.
That’s a distinction worth repeating: a fiduciary liability policy insures the people who administer such funds and the company if they are named in a lawsuit alleging errors or misconduct, but the funds themselves are protected by an ERISA bond. Your company should have both coverages.
Talk with your insurance agent or broker to make sure the correct names for the plans are included in the documents, and add any new plans as soon as possible. Also discuss plan funding levels and how much the bond will insure for over time.
Contact Rettino Insurance for all your business insurance needs.