Prove It: Defense Is a Must



Litigation related to employee benefits is a growing area of risk for businesses, and, when allegations are made, sound defense is a must. Consider, for example, that in cases brought against retirement plan sponsors, the Department of Labor has leveraged ERISA law, placing the burden of proof on plan fiduciaries.


Fiduciary Breach?

Anyone involved in the design and administration of a company sponsored retirement plan risks being held personally liable for breaches under the deep, complex and high standards of ERISA. Indeed, litigation is a growing area of exposure, and, as “plaintiffs’ lawyers continue to press new theories of liability and pursue class-based claims,” the  “complexity—and thus the cost—of employee benefits lawsuits,” is on the rise.


As litigation plays out, the trend, once a claim has been made, is that defense, with its burden of proof, has fallen heavily on plan fiduciaries. The Department of Labor (DOL) has even argued that “where ERISA is silent, principles of trust law — from which ERISA is derived — should guide the development of federal common law under ERISA. Trust law provides that once a beneficiary establishes a fiduciary breach and a related loss, the burden on causation shifts to the fiduciary to show that the loss was not caused by the breach.” In other words, “the burden to disprove loss causation… after a plaintiff demonstrates a fiduciary breach and a related loss,” becomes the responsibility of fiduciaries.


As the sheer volume of ERISA litigation grows, it’s critical for plan sponsors to be prepared to defend their decisions and provide documentation that prudent processes are consistently followed in the oversight of the plan. Even if allegations of a fiduciary breach turn out to be unsubstantiated, the burden of proof is costly: attorney fees for defense in ERISA cases are upwards of $600—per hour. Perhaps even more disruptive for businesses and their owners is that litigation tends to drag on for years. Risk management experts remind us that protection is best practice: “All indications point to a continued escalation of ERISA litigation….Retirement plan sponsors have enough on their plates dealing with the elements under their control, so they should pursue remedies, like fiduciary liability insurance, that relieve the exceptional burden of things they cannot control.”


Making Protection Affordable

Colonial Surety Company is here to help. In addition to making it easy and speedy for plan sponsors to comply with the Department of Labor’s ERISA Fidelity Bond protocols, we provide affordable protection for your business and yourself all in one place. Plan sponsors can get protected in minutes today. Just log in to your account and opt in for our affordable Fiduciary Liability Insurance, which even includes, 50k Cyber Liability Insurance,


Shield your personal and business assets for a few dollars a day, while ensuring:



  • DOL Compliance: The Department of Labor stresses the importance of Cyber Liability Insurance, considering its absence as a fiduciary breach. Our coverage not only safeguards the plan but also protects your business.




  • Comprehensive Protection: All our packages include Fiduciary Liability Insurance, ensuring your business and personal assets are protected from the repercussions of fiduciary breaches.




  • Cost-Control: Our packages are available for 1, 2, and 3-year terms, providing flexibility and locked-in rates.



Protect yourself, your business and your plan in a few minutes now:


Fiduciary and Cyber Liability Insurance HERE 


Colonial Surety Company is rated “A Excellent” by A.M. Best Company, U.S. Treasury listed and in business all across the country. Serving customers since 1930, we are the trusted source for the pension industry to secure legally required ERISA bonds, fiduciary liability insurance and cyber-liability insurance. We help safeguard plan sponsors, pension professionals and financial advisors — and keep their businesses compliant — with pain-free, efficient, and friendly service every time.