A client that provides any form of benefits needs two different types of protection:
(1) Employee Benefit Liability that covers wrongful administration of those benefit programs and pays the benefit that should have been paid had the error or omission not occurred.
(2) Fiduciary Liability that covers the legal liability of defined insureds, including that imposed by ERISA.
In many coverage forms today, the Fiduciary coverage includes the wrongful administration E & O coverage, thus eliminating the need for EBL to be included typically as part of the CGL and a scheduled underlying policy on the Umbrella.
In case you ever marveled at the inexpensive nature of the EBL coverage – here’s the answer: the coverage is very narrow. Of course, that means that the broader coverage of the Fiduciary policy will be a higher premium. Well, yes.