Retirement Insurers Adapt to Opportunity, Risks Under 401(k) Law
D&O and Management Liability Insurance attorney Thomas Bentz was quoted in a Bloomberg Law article discussing how business insurance underwriters are looking to new legislation to encourage small employers to establish retirement plans. The SECURE 2.0 Act, enacted in December 2022, earmarks new tax credits for small businesses to cover the costs of setting up a plan and will establish new starter 401(k) designs to make the process smoother. Mr. Bentz commented on an important component in this process: fiduciary liability insurance. He explained that small employers tend to overlook coverage, but if plan participants sue their employer for breaching their fiduciary duty or for plan administration errors, fiduciary liability insurance is the only type of coverage that will protect them from being held personally liable.
"It's specialized, but extremely important," he said. "It can be difficult to get that message across."