The differences between fiduciary vs employee benefits liability are often confusing for new business owners. In fact, fiduciary and employee benefits liability is often mistaken for one another. However, it is important to note that fiduciary and employee benefits do not provide the same coverage. There are notable distinctions between fiduciary liability vs employee benefits liability.
Fiduciary liability insurance will protect you and your company if one of your employees claims that a breach of fiduciary duty has taken place. In simple terms, fiduciary duty is a legal term entailing the confirmation of responsibility to make decisions in the best interests of another party. If a party fails to assume this responsibility, a breach of fiduciary may have occurred. In business, persons involved in the distribution of employee benefits and healthcare are federally legal fiduciaries.
Employee Benefits Liability
While employee benefits liability involves employee benefits and healthcare, it is still different from fiduciary liability insurance. Generally, employee benefits liability insurance will cover accidental errors or omissions that may occur while associated parties distribute employee benefits or healthcare. Employee benefits liability protects your business and employees from legal consequences in the case of an honest error involving employee benefits or healthcare plans.