Fiduciaries: What Do They Do?

A fiduciary is a person who administers other people’s money or goods. If you are designated as a fiduciary for someone, you are in charge of managing their assets and putting the client’s needs above your own. 

Fiduciary Insurance

This is a serious and sometimes risky job. Fiduciaries can handle many very important things, as well as money. They need fiduciary insurance to protect them from claims of mismanagement. These sorts of claims usually occur when a fiduciary loses money due to poor decisions or unwise investments. 

They can be better protected by purchasing fiduciary insurance.

Steps to Avoid Needing Fiduciary Insurance

To avoid claims against you, it’s essential to do your fiduciary job well. Here are a few basic tips on doing so:

  • Act for the benefit of the other person. Take wise decisions that will bring profit to them. 
  • Administer money and goods with commitment.
  • Keep the money and goods separated and in excellent condition. Do not mix them with yours or anyone else’s.
  • Keep records. Do not skip this step. Your records must be complete, legible and credible. Your records can save you from legal consequences and help you if you need fiduciary insurance to cover you.

Because of the great responsibility you have, prioritize purchasing fiduciary Insurance. It can protect you from future claims, covering costs of legal process.

Why Fiduciary Liability Insurance Matters for Your Business

As a fiduciary, you bear the responsibility for your clients’ finances. You promise to act in their best interest at all times even if that means losing out on opportunities to increase your commissions. Unfortunately, accidents happen and, when they do, you may be liable for the damages. Fiduciary liability insurance is a simple way to protect your business and your reputation.

What This Coverage Does

Fiduciary liability coverage protects you from having to pay settlement fees, legal fees and attorney fees out of pocket if a client sues your company. This helps you better preserve your budget and makes it possible to keep your company afloat during and after the lawsuit. Without the policy, many businesses find it difficult if not impossible to recover after even a single lawsuit.

What To Look for in a Policy

Remember, your general liability insurance isn’t going to be enough to fully protect your company if you’re in charge of overseeing any type of investment or monetary contributions. Investing in a fiduciary liability insurance policy is the only way to cover your bases.

When shopping for a policy, keep the following in mind:

  • The coverage limits
  • The reputation of the insurance company
  • The premium amount

By being selective and reviewing each insurance policy in detail, you’ll be able to find the right coverage for your company.