In response to the Department of Labor’s April 2021 guidance on cybersecurity and data privacy, Colonial Surety recently announced the expansion of its fiduciary liability product offering for 401k plan sponsors, adding a new two-part package that includes cyber liability coverage.
Woodcliff Lake, N.J.-based Colonial Surety, a direct and digital insurer, says the new package offers “comprehensive and affordable fiduciary liability insurance for plan sponsors, protecting assets from claims of fiduciary breach, as well as cyber liability coverage to safeguard employees’ personal data and assets against cybersecurity threats.”
The new product enables plan sponsors to respond to recent updates to the DOL guidance on cybersecurity and data privacy, as well as protect against one of the most significant risks facing businesses today. The DOL’s first-ever formal cybersecurity guidance for retirement plan sponsors, plan fiduciaries, and the service providers they hire to assist them followed some serious prompting over the last decade from the ERISA Advisory Council and from the GAO, who warned of the cybersecurity risks to employee benefit plan administration and urged the DOL to establish minimum expectations for managing and mitigating these risks.
“The guidance issued by the DOL in April is a clear statement that it sees cybersecurity as a key fiduciary responsibility for all plan sponsors. Businesses now have no choice but to be proactive about protecting the privacy and personal information of their retirement plan participants,” said Colonial Surety President Wayne Nunziata.
“Cybersecurity is both a significant risk and a major blind spot for many 401k plans. Our new package allows us to support plan sponsors with comprehensive, cost-effective cyber liability solutions, and we will continue to encourage the wider industry to adopt cyber liability protection as a best practice for all businesses.”
The new fiduciary-and-cyber liability package includes coverage that protects the assets of the retirement plan sponsor, and the personal assets of individuals involved in the management of the plan, from exposure in the event of a lawsuit alleging breaches of fiduciary duty. Additionally, the unique cyber liability protection included in the package protects businesses as well as their retirement plans from covered losses and response expenses in the event of a cyber breach.
In particular, the built-in cyber liability protection provides coverage for the costs of legal services, computer forensic services, public relations and crisis management expenses, notification services, call-center services, credit-monitoring, identity-monitoring or other personal fraud or loss-prevention solutions. It also includes defense and indemnity from covered lawsuits by third parties.
The new fiduciary-and-cyber liability package is available to any company that sponsors a retirement plan and already has an ERISA bond in place. It complements Colonial’s existing ERISA Package, which includes fiduciary and cyber liability coverage, alongside Colonial’s own ERISA bond.
SEE ALSO: