Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Commercial LinesHard
A Florida-based property management company oversees a portfolio of commercial buildings, including office parks and retail centers. They are concerned about their exposure to claims arising from alleged mismanagement of employee benefit plans, such as 401(k) plans or health insurance programs, for the employees working within their managed properties. Which specialized liability coverage would address this specific risk?
- ACommercial General Liability (CGL)
- BEmployment Practices Liability (EPL)
- CProfessional Liability
- DFiduciary Liability
Show answer & explanationAnswer & explanation
Correct answer: D. Fiduciary Liability
Fiduciary Liability insurance is specifically designed to protect fiduciaries (individuals or entities responsible for managing employee benefit plans) against claims of errors, omissions, or breaches of fiduciary duty in their administration of these plans. Standard CGL and Professional Liability policies do not cover this specialized exposure.
Why the other options are wrong
- A. Commercial General Liability (CGL) covers bodily injury, property damage, personal injury, and advertising injury, but specifically excludes fiduciary liability.
- B. Employment Practices Liability (EPL) covers claims related to wrongful termination, discrimination, harassment, and other employment-related issues, not benefit plan administration.
- C. Professional Liability (E&O) covers errors or omissions in rendering professional services, but typically does not extend to the administration of employee benefit plans.
Fiduciary Liability Insurance
A type of liability insurance that protects fiduciaries of employee benefit plans (e.g., 401(k)s, health plans) against claims arising from alleged errors, omissions, or breaches of their fiduciary duties in the administration of these plans.
- Protects fiduciaries of employee benefit plans.
- Covers errors, omissions, or breaches of duty.
- Distinct from CGL, Professional Liability, and EPL.
Memory trick: Liabilities: 'GENERAL' for premises, 'PRO' for advice, 'FIDUCIARY' for funds.