Fiduciary Is The ALIGNED Term of The Day

ALIGNED Term of the Day Is: Fiduciary

Fiduciary is defined as an individual or corporation that:

  1. Exercises any discretionary authority or discretionary control in managing a pension or benefit plan or exercises any authority or control in managing or disposing of its assets,
  2. Renders investment advice for a fee or other compensation, with respect to any monies or other property belonging to the plan, or
  3. Has any discretionary authority or responsibility in administering a benefit plan.

Click here to read the full definition of a Fiduciary’s obligation.

What is a Fiduciary Liability Endorsement?

For example, a bank’s fiduciary liability endorsement can be added to the general liability policy. The fiduciary liability endorsement provides general liability protection for the financial institution, its executive officers or employees, trust beneficiaries, and others as delineated in the endorsement for bodily injury (BI) or property damage (PD) liability arising out of the ownership, maintenance, or use of property in any trust for which the named insured is acting in a fiduciary or representative capacity.

Trust accounts may possess property from which liability exposures arise, and the financial institution has a liability exposure arising from this property due to its control of the property. The endorsement extends the financial institution’s general liability policy to provide coverage for these liability exposures. Certain policy provisions and exclusions are altered slightly in order to remain applicable to the insured trust.

What is a Waiver of Recourse Endorsement?

A Waiver of Recourse Endorsement is an endorsement to a fiduciary liability insurance policy that prevents an insurer from exercising its subrogation rights against an insured fiduciary. Premiums for this endorsement are based on a charge per covered fiduciary. Unlike most other forms of insurance, under fiduciary liability policies, insurers sometimes exercise subrogation rights against insureds for non-willful or criminal acts. Insurers’ rationale for subrogating against insureds is based upon the fact that insureds should not be absolved of wrongdoing when the premiums for fiduciary liability coverage are paid from the assets of the employee pension and welfare plans the fiduciaries are charged with administering.

To learn more about fiduciary responsibility, the liability associated with acting as a fiduciary, or a waiver of recourse endorsement, contact an ALIGNED Advocate today or connect with us at

ALIGNED Across Canada   100% Canadian owned, ALIGNED is a premiere insurance brokerage that serves more than 1,400 clients across the country. ALIGNED’s offices in Toronto, Calgary and Vancouver are supported by a national operations centre in Cambridge, Ontario. Uniquely within the industry, ALIGNED creates, negotiates and delivers the best business insurance and risk management strategies/solutions to organizations like yours.

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