Do you act as advisor or consultant for any Taft-Hartley, union, or governmental employee benefit plans?

This question helps the insurance carrier assess the risk associated with advising or consulting for Taft-Hartley, union, or governmental employee benefit plans. These plans often involve complex regulatory requirements, fiduciary responsibilities, and large participant bases, which can increase liability exposure and impact coverage terms or premiums for Errors and Omissions (E&O) insurance.

• What is a "Taft-Hartley Benefit Plan"? Also called a multiemployer pension plan, this is a retirement or welfare plan established through collective bargaining between labor unions and multiple employers. They are governed by a joint board of union and employer representatives.
• What is a "Union Benefit Plan"? Any employee benefit plan that is sponsored by a labor union for its members.
• What is a "Governmental Benefit Plan"? Any employee benefit plan provided for government employees, such as a state, local, or federal pension plan.
• What is "ERISA"? The Employee Retirement Income Security Act of 1974 is a federal law that sets minimum standards for most voluntarily established retirement and health plans in private industry to provide protection for individuals in these plans.
• What is "Fiduciary Responsibility"? A legal and ethical obligation to act solely in the best interest of another party. In this context, it means acting in the best interest of the plan participants and beneficiaries.

To answer this, you must determine if your firm provides advisory or consulting services to any of the following specific types of employee benefit plans:

• Taft-Hartley Plans: Do you advise any multiemployer pension plans, which are common in industries like construction and are established through collective bargaining agreements?
• Union Plans: Do you provide advisory services for any benefit plans sponsored directly by a labor union for its members?
• Governmental Plans: Do you work with any benefit plans for state, local, or federal government employees?

If you provide services to any of these plan types, you must answer "yes" and be prepared to provide details. If not, you can answer "no."

• Mistake: Not understanding what a Taft-Hartley plan is.
  • These are multiemployer pension plans governed by a joint board of union and employer trustees. It's a specific structure with unique risks.
• Pitfall: Thinking an indirect or limited role doesn't need to be disclosed.
  • The question covers any advisory or consulting role, even if you do not directly manage the plan's assets. Providing strategic guidance or recommendations is a disclosable activity.
• Mistake: Believing that only private-sector plans matter.
  • This question specifically asks about governmental plans, which have their own unique regulations and risk profiles that must be disclosed to the insurer.