DOL regulations require all Plans to maintain an ERISA Fidelity Bond. This bond must be 10% of Plan assets, can be no less than $1,000 and need not be higher than $500,000 (or $1,000,000 for plans that hold employer securities). More information is available here: Protect Your Employee Benefit Plan With An ERISA Fidelity Bond.
Although there are many insurance carriers where you can obtain an ERISA Bond, our clients have had positive experiences with Colonial Surety Company.
Note that some carriers, including Colonial Surety, offer a provision to automatically increase the bond’s coverage to ensure that your Plan is properly covered while the policy is in effect. This is called an auto-inflation or extended coverage provision and is helpful so that you will not need to deal with this every year. If you are purchasing the bond for a startup plan, you can select the lowest coverage available ($1,000 of qualifying Plan assets and $0 for non-qualifying assets) but add the auto-inflation guarantee.
Furthermore, some carriers may recommend Fiduciary
Liability insurance. An ERISA
is not the same thing as Fiduciary
Liability Insurance. An ERISA
is required by the DOL to insure the plan, whereas Fiduciary
Liability Insurance is an added coverage to protect the fiduciary
. For more information, please refer to our 401k resource on ERISA Fidelity Bonds and Fiduciary Liability Insurance