ERISA Fidelity Bonds for Plan Administrators

Step 1 of 4

What type of Plan is this?

Coverage is required for any employee benefit plan holding assets.

401(k) Plan Defined Contribution plans. Most common for businesses.

Pension / Defined Benefit Traditional pension plans guaranteeing monthly payouts.

Profit Sharing / ESOP Employee Stock Ownership or other welfare plans.

Are you a Union Plan?

We bond multi-employer and union plans. However, these require specific underwriting. Please call for Labor Organization Bonds.

Why is this bond mandatory?

Under ERISA Section 412, every fiduciary of an employee benefit plan and every person who handles funds must be bonded.

Protection: It insures the plan against losses due to fraud or dishonesty by plan officials (e.g., theft).
Compliance: Failure to have this bond can trigger a Department of Labor audit and prevent you from filing Form 5500 correctly.

Step 2 of 4

Total Plan Assets?

The bond amount must be at least 10% of the funds you handle.

Under $1 Million

New or Small Plans. Bond limit will be 10% (e.g., $50k).

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$1M - $5 Million

Growing Plans. Bond limit typically $100k - $500k.

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Over $5 Million

Max requirement is usually $500,000 (or $1M for plans with employer securities).

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Does the plan hold "Employer Securities"?

If your plan includes company stock (not open market stock, but your own company stock), the maximum bond requirement increases from $500,000 to $1,000,000.

Step 3 of 4

Select Bond Term

Multi-year terms lock in your rate and prevent compliance gaps.

1 Year Standard

3 Years Discounted

The "Inflation Guard" Benefit

Our bonds include an Inflation Guard endorsement. This means if your plan assets grow during the year, the bond limit automatically increases to keep you compliant with the 10% rule, without you having to pay extra until renewal.

Step 4 of 4

Are you covered for Errors?

An ERISA Bond covers theft, but NOT bad investment decisions.

Fiduciary Liability Insurance Protects you if employees sue you for mismanagement of plan funds or admin errors.

Cyber Liability Protects 401(k) participant data from hackers and breaches.

Fidelity Bond vs. Fiduciary Liability

This is the #1 confusion for plan sponsors. The ERISA Bond is required by law; Fiduciary Insurance is optional (but highly recommended).

Key Differences:

ERISA Bond (Mandatory)

Covers Theft. Protects the Plan Assets from dishonest employees.

Fiduciary Liability (Optional)

Covers Errors. Protects the Business Owner from lawsuits regarding poor investment choices or negligence.

ERISA Bond

Instant Issue

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How much does an ERISA Bond cost?

ERISA bonds are inexpensive fidelity products. No credit check is required for standard limits.

Small Plan

$100 / year

Minimum

Up to $100k Coverage
Covers plans with assets under $1 Million.

Best Value

3-Year Term

Save 25%

Bundle

Lock In Compliance
Purchase a 3-year bond to avoid annual renewal hassles and save money.

Large Plan

$300 - $500

Max Limit

$500k Coverage
For plans with assets exceeding $5 Million.

Frequently Asked Questions

How much coverage do I need?

You need 10% of the plan assets as of the beginning of the plan year. For example, if your plan has $1,000,000 in assets, you need a $100,000 bond. The minimum is $1,000 and the maximum is usually $500,000.

Do I need a bond if I am the only participant?

Generally, no. Solo 401(k) plans (covering only the owner and spouse) are often exempt from the ERISA bonding requirement. However, once you hire a non-spouse employee who participates, you must get bonded immediately.

What does "Inflation Guard" mean?

This is a special clause in our bonds. If your plan assets increase during the year (due to contributions or market gains), the bond limit automatically increases to ensure you stay compliant with the 10% rule without needing to buy a new bond mid-year.

Is a credit check required?

No. ERISA bonds are "fidelity" bonds (insurance against theft), not credit-based surety bonds. We do not run a credit check on the business owner for standard ERISA coverage.