The Employee Retirement Income Security Act of 1974 (ERISA) protects employee benefit plans against loss by acts of fraud or dishonesty. The statute institutes a fidelity bond requirement for plan trustees including required coverage limits. The ERISA Fidelity Bond limit must equal ten percent (10%) of the funds handled by a Trustee or Fiduciary with a minimum bond limit of $1,000 per plan and a maximum bond limit of $500,000 per plan. The Pension Protection Act of 2006 changes the bonding requirement for those Plans holding employer securities, by increasing the maximum limit from $500,000 to $1 million dollars per plan.
ERISA Bonds are available as stand alone coverage on the Wrap+® policy, or the coverage can be added to the Wrap+® Crime policy or the Financial Institution Bond for Insurance Companies with Extended Coverages. The policy provides coverage for loss of property of an Insured Plan resulting directly from dishonesty or fraudulent acts committed by an Employee.
The Wrap+® policy includes Travelers unique Inflation Guard coverage, which automatically maintains the ERISA required limit during the policy period. As long as the insured purchases the required limit of liability at inception of the policy, Inflation Guard automatically provides a limit of liability equal to that required by ERISA. It also requires plans to carry a limit of 10% of total plan assets up to the maximum of $500,000 per plan or $1 million per plan that holds any employer securities.
Key coverage features include Omnibus Named Insured language for any plans of the named sponsor, blanket protection on all Employees, per occurrence coverage form with no aggregate limit, and amends the definition of Employee to include all Trustees and Directors.
"Nothing stated herein affects the terms, condition and coverages of any insurance policy or bond issued by any of the referenced insurers, nor does it imply that coverage does or does not exist for any particular claim or type of claim under any such policy or bond. Availability of coverage referenced in this document can depend on underwriting qualifications and state regulations."
Coverage underwritten by Travelers Casualty and Surety Company of America and its property casualty affiliates, Hartford, CT 06183