Do Georgia nonprofits really need directors and officers insurance?

Georgia nonprofits with a board of directors should carry directors and officers liability. Board members have personal legal exposure for decisions they make, even as volunteers.

Do nonprofits need management liability insurance?

Yes. Nonprofits face the same management lawsuits as for-profits including discrimination claims, board decisions, and employee issues. Management liability typically includes directors and officers, employment practices, and fiduciary liability coverage.

What does management liability insurance cover?

Management liability is an umbrella term for coverages protecting a company and its leaders from claims arising out of business decisions and governance.

What makes Berkley Management Protection a strong choice for directors and officers and employment practices coverage?

Berkley Management Protection specializes in management liability: directors and officers, employment practices liability, and fiduciary liability.

What is abuse and molestation coverage and why does a Georgia nonprofit need it?

Georgia nonprofits running programs with minors or vulnerable adults need abuse and molestation coverage as a critical liability layer.

Management Liability FAQs

What is fiduciary liability insurance and why does a Georgia company with a 401k need it?

All FAQs

Quick answer: Fiduciary liability covers plan administrators and the company from claims by plan participants that the 401k or pension plan was mismanaged.

Fiduciary liability insurance protects the people who manage a company's employee benefit plans against claims that they mishandled those plans. A Georgia company sponsoring a 401(k) needs this coverage because federal law makes plan decision-makers personally responsible for their choices, and that personal liability is not covered by most other business policies.

Who is a fiduciary under ERISA?

A fiduciary is anyone with authority over a benefit plan, including owners, executives, and HR staff who select investment options, choose plan vendors, or determine eligibility. Under ERISA (the Employee Retirement Income Security Act), fiduciaries can be held personally liable for losses caused by their decisions. Personal assets, not just company funds, can be at risk.

What does fiduciary liability insurance cover?

Fiduciary liability insurance commonly covers claims of imprudent investment choices (such as offering funds with excessive fees), administrative errors like late enrollment or miscalculated benefits, breach of fiduciary duty allegations brought by employees or regulators, and legal defense costs. Defense costs alone can be significant even when the company acted in good faith. Businesses that carry a business owners policy should know that fiduciary coverage is a separate line not included in standard packaged policies. See which businesses qualify for a BOP to understand where standard coverage ends.

How is fiduciary liability different from the ERISA fidelity bond?

An ERISA fidelity bond protects the plan against theft of its assets, and federal law requires it. Fiduciary liability insurance is different: it protects decision-makers against claims about their judgment rather than dishonest acts. The bond is mandatory; the fiduciary policy is optional but fills a gap the bond does not address. Because many fiduciary policies are written on a claims-made basis, understanding how claims-made versus occurrence policies differ is useful context when evaluating your options.

What does a fiduciary claim actually cost to defend?

For example, employees at a Georgia manufacturer allege the company's 401(k) offered high-fee investment funds that eroded their retirement savings over years. Legal defense alone reaches $90,000 before any settlement. Fiduciary liability insurance responds to defend the plan administrators and pay covered amounts, keeping their personal assets protected.

For example, an HR director at an Atlanta company inadvertently omits a new employee from the health plan for three months. The employee incurs $18,000 in uncovered medical costs and files a claim under ERISA. General liability insurance does not cover this scenario; fiduciary liability insurance does.

Which Georgia companies should carry fiduciary liability insurance?

Any company sponsoring a retirement plan, health plan, or flexible spending account has fiduciary obligations under ERISA, regardless of plan size. Employers reviewing their full coverage picture may also want to confirm how workers compensation insurance works in Georgia alongside fiduciary coverage. A licensed advisor can review your benefit plans and help identify appropriate coverage limits. Request a free coverage review to start that conversation.