Companies facing litigation over their employees’ 401(k) plan fees are increasingly discovering they’ll have to pay $10 million or more in defense costs before their insurer will begin footing the bill.
A sharp spike in lawsuits over retirement plan fees has wreaked havoc on the market for fiduciary liability insurance, which provides protection for companies accused of mismanaging their employee benefit plans. This coverage helps fund litigation costs when a company is sued for fiduciary breach under the Employee Retirement Income Security Act.
Until recently, these policies were simple to acquire and inexpensive compared to other business insurance.
But the ...