AIG Executive Liability, a unit of AIG Commercial Insurance, introduced Public Entity Plan and Trustee Protector, a policy that protects individuals who manage public entity employee benefit plans from fiduciary liability exposures.
A number of recent high-profile cases have spotlighted the liability of individuals who oversee public entity employee benefit plans. While these plans are regulated at the state and local level and are not subject to the Employee Retirement Income Security Act (ERISA), fiduciaries of such plans nonetheless may be held personally liable to restore losses to a plan caused by their breaches of duty. Often, sovereign immunity is either not available or cannot be relied upon. Fiduciaries can face suits from plan participants, their beneficiaries, government agencies, watchdog groups and even concerned taxpayers.
Public Entity Plan and Trustee Protector is available in more than 30 states, with limits of up to $50 million. The policy includes broad coverage for trustees, employees, elected or appointed officials, the benefit plan and the retirement system for claims alleging breaches of employee benefit law or errors in plan administration.
“We created Public Entity Plan and Trustee Protector in response to rising concern about the personal liability of managers of public entity employee benefit plans. This policy specifically addresses the unique litigation issues faced by these individuals.” said Michael Smith, president, AIG Executive Liability.
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