A vital concern sweeping businesses across the country is a term called “silent cyber”, or the coverage for cyber devastation under traditional property and casualty insurance policies, in contrast to purpose-built cyber insurance policies. A recent lawsuit details how a cyber-loss could potentially spark a fiduciary liability policy.
Some background on the case: Heide Bartnett a retired former employee of Abbott Laboratories, is a plan participant in the Abbot Laboratories Corporate Benefits Stock Retirement Plan a 401(k) savings plan. On December 29, 2018, a hacker tried to open Bartnett’s account through the plan website. The skilled hacker already acquired the last four digits of Bartnett’s social security number, her email account, and date of birth. The intruder was able to change the account password and added direct deposit information for a Sun Trust bank account. In another compliant, Bartnett detailed that the notice of the change in her account information was sent continuously via U.S. mail rather than email, as was her preferred means of communication. On January 2019, Bartnett told Abbot Corporate Benefits to report she had money missing from her account. She then filed a lawsuit against Abbot Laboratories, Abbot Corporate Benefits and Abbot Laboratories Stock Retirement Plan, the plan administrator, and Alight Solutions, alleging the defendants did not use an adequate level of care, protection, and diligence demanded for an ERISA fiduciary in order to safeguard Bartnett’s assets.
Colonial Surety Company provides fiduciary liability insurance for plan administrators handling employee benefit plans. Fiduciaries are defended and indemnified from covered plan participant lawsuits with fiduciary liability insurance, and valuable company data and information of the plan and company are protected with cyber liability insurance—all found in our ERISA bond packages. Contact us today to obtain your ERISA fidelity bond package today.