Get Investment Advisor Erisa Bond Bapplicationb - Napliacom

An ERISA bond must have a coverage amount (known in surety bond terms as a penalty sum) equal to at least 10 percent of the plan assets that the fiduciary handles. In most cases, the minimum amount of coverage required is $1,000 and the maximum amount is $500,000.

In general, the premium you pay for any commercial bond primarily depends on the total bond amount. For example, a bonding company might decide to charge you 1% for a surety bond. That means a $2,000 bond would cost $20, and a $10,000 bond would cost $100 annually.

Is an ERISA fidelity bond expensive? Most insurance companies charge between $100 to $300 per year for an ERISA fidelity bond.

As described above, the main difference between ERISA bond and fiduciary coverage is what each insures. Whereas the ERISA fidelity bond protects the participants in the plan, the fiduciary liability insurance covers the business owners and individuals operating that plan.

Each plan must obtain a fidelity bond in an amount equal to at least 10% of the amount of the plan assets. Example: A company plan that has funds that total $1 million would require a fidelity bond of at least $100,000.

Bonds must be obtained from a surety or reinsurer that is named on the Department of the Treasury's Listing of Approved Sureties, Department Circular 570 (available at fms.treas.gov/ c570/c570. html). Under certain conditions, bonds may also be obtained from Underwriters at Lloyds of London.

§ 2580.412-6, any investment advisor/fiduciary who “handles” ERISA funds must be bonded as well as advisors that have access or decision making authority over ERISA plan assets (unless under specific exemption which applies primarily to certain banks, insurance companies and registered broker dealers).