Who has?
Is it a good idea? Necessity?
Where to get it?

Everyone.
Yes.
http://benefitslink.com/yellowpages/errors.html

E&O (Professional Liability) Insurance should be very inadequate and inappropriate for any TPA, Administrative service provider etc. Your needs would be much better served with Fiduciary Liability Insurance.

Loook at the BenefitsLink Q&A section on Fiduciary Liability Insurance and do a Google search for explanations of the differences etc.

Thanks.... I will do a search.

GBurns - why do you think E&O insurance is inappropriate for a TPA? And how could fiduciary liability insurance possibly be appropriate for a TPA? Unless they take on additional duties, a TPA by nature is not a fiduciary of a plan.

I will leave the question of Fiduciary vs. E&O to the legal experts - which type of ins. is appropriate in all or specific situations is not my bailiwick. Purely for informational purposes - we've had clients audited by the DOL in the past, and a couple of them have paid penalties for fiduciary breach. In all cases, however, the DOL has looked at our legal agreements with clients, and the facts and circumstances of each case, and they have immediately determined that we are in no way a fiduciary or operating in any fiduciary capacity.

We're very careful to avoid any fiduciary actions. Can someone argue that we are acting as fiduciaries? Sure - you can bring suit and argue anything.

If the fiduciary liability insurance isn't too expensive (and if the ins. companies will even issue it to someone who is not a fiduciary?) maybe it would be a worthwhile safety net. Have any of you (TPA's) ever had to pay up because you have been found to be operating in a fiduciary capacity? I'm under the impression that fiduciary liability insurance costs are skyrocketing - so it might be a pretty expensive safety net? And would you have to purchase this coverage for each plan, or is there "blanket" fiduciary coverage for TPA's that would cover all plans you administer?

We have E&O with a reasonably hi deductible. We change carriers from time to time to get the best deal. We've had the coverage for 17 years and fortunately no claims. I think it w/b foolish to not have it.

I agree that fiduciary ins. w/b a good "safety net", but I think you'll find it very expensive. IMO, the better result is to carefully conduct yourself at all times so that you are not quacking like a fiduciary.

Good Luck!

Pesions in Paradise

I am not a lawyer so Rather than attempting a lengthy discourse I suggest that you do a Google search to get expert opinions on which coverage is more appropriate and when/why etc.

The Q&A has a section that discussed many of the issues:
http://benefitslink.com/modperl/qa.cgi?db=...ional_liability