Liability Insurance for ERISA Plan Sponsors: Minimizing Financial Risks During the Pandemic and Economic Downturn

Strafford

Maximizing Coverage Under Employee Benefits and Fiduciary Liability Policies; Errors, Oversight, Negligence, Service Providers

A live 90-minute premium CLE webinar with interactive Q&A

This CLE webinar will help ERISA counsel evaluate the adequacy of plan sponsors' liability coverage in light of liability exposures created by the pandemic, economic downturn, recent DOL and IRS regulations, and the Affordable Care Act (ACA). The panel will review the current state of case law discussing employee benefits liability (EBL) and fiduciary liability coverage and guide counsel in overcoming insurer objections to coverage for claims stemming from recent DOL and IRS regulations and under the ACA.

Amid the pandemic and shifts in the economy, companies and their employees face significant economic challenges. Companies must assess and consider the risk of claims related to their sponsorship, oversight, or administration of an employee benefit plan and determine whether liability insurance may be available to minimize financial risk.

The COVID-19 pandemic has forced businesses to downsize. Also, the volatility in the financial market negatively impacted investment funds holding employee benefit plan assets, resulting in significant losses to plan beneficiaries. The DOL and the IRS issued several regulations providing relief for benefit plans but present administrative challenges for plan sponsors and administrators.

Plan sponsors, the plans themselves, and third-party administrators providing financial or consulting services to employee benefit plans face a risk of liability under ERISA. Several causes of action for breach of fiduciary duty can arise, such as administrative errors causing lost benefits, failure to monitor service providers, negligent investment practices, and other actions negatively impacting plan beneficiaries.

ERISA plan sponsors and fiduciaries will find it prudent to have sufficient liability coverage in place to protect against a host of potential claims. EBL insurance protects plan sponsors from damages arising from the administration of employee benefit plans. It may provide coverage for claims denied under exclusions for employment-related practices in CGL policies and not covered under fiduciary liability policies.

Listen as our panel of employee benefits attorneys and insurance professionals explains best practices for assessing coverage under EBL, fiduciary liability, and CGL policies. The panel will help benefits counsel assess plan sponsors' EBL coverage for potential claims and offer strategies for countering insurers' denial of coverage for claims.

Outline:

• Potential employee claims
  • Recent DOL and IRS regulations and guidance
  • Administrative errors
  • Monitoring third-party service providers
  • Investment practices
• Understanding and negotiating types of coverage
  • EBL insurance
  • Fiduciary liability insurance
• Best practices for procuring adequate coverage
• Best practices for plan sponsors facing a potential claim or assessment/enforcement action
• Review of cases interpreting EBL and fiduciary liability coverage and employment-related practices exclusions

The panel will review these and other key issues:

• What are the potential liability risks and claims resulting from the pandemic and economic downturn?
• What liability risks and claims exist under the ACA for plan sponsors?
• What coverages are available under EBL and fiduciary liability policies?
• What potential coverage disputes are likely to arise with insurers, and how can plan sponsors effectively argue for coverage?
• How do different courts currently interpret the "administration" of employee benefit plans?

Faculty:

• Donald W. Kiel, Partner, K&L Gates
• Stephen D. Rosenberg, Partner, The Wagner Law Group
• Roberta Casper Watson, Partner, The Wagner Law Group

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