The Employee Retirement Income Security Act of 1974 (ERISA) imposes upon plan sponsors and the individuals who administer employee benefit plans some of the most exacting standards of conduct known to American law. Fiduciaries must act prudently, diversify plan investments to minimize the risk of large losses, avoid conflicts of interest, and adhere to plan documents insofar as those documents conform to the statute (Higginbotham 2026). For decades, these obligations operated largely as background principles. Over the past several years, however, they have become the engine of a litigation surge that now defines the retirement and welfare benefit landscape. The empirical record establishes that fiduciary breach actions against employer plan sponsors are not merely persisting but expanding in volume, in theory, and in the universe of defendants exposed. This essay examines that surge and argues that the structural durability of the trend, combined with the personal and corporate liability that ERISA imposes, renders fiduciary liability insurance an essential, rather than discretionary, component of responsible plan governance.<\/p>\n\n\n\n
The Empirical Surge<\/strong><\/p>\n\n\n\n The quantitative evidence of escalation is unambiguous. Industry trackers recorded a near record high of 155 fiduciary class action lawsuits in 2025, alleging violations of ERISA and breaches of fiduciary duty (Encore Fiduciary 2026; Miller Shah 2026). Within that total, traditional excessive fee lawsuits reached their highest level since 2020, with 94 class actions filed, while allegations of imprudent investment selection and improper handling of plan forfeitures grew consistently throughout the year (Miller Shah 2026). When traditional excessive fee claims and the newer wave of forfeiture claims are counted together, more ERISA class actions targeting defined contribution plans were filed in 2025 than in any prior year on record (Mayer Brown 2026).<\/p>\n\n\n\n These figures sit atop a decade of accumulated activity. More than 600 lawsuits alleging excessive fees and imprudent investments have been filed against ERISA defined contribution plans over the past ten years (Miller Shah 2026). Critically, the procedural posture of these cases favors plaintiffs even where the underlying merits are contestable. Between 60 and 65 percent of excessive fee lawsuits have survived the motion to dismiss, at which point sponsors and their insurers confront the prospect of spending millions of dollars on document production and discovery before any adjudication on the merits (Encore Fiduciary 2026). The litigation is also concentrating on midsized plans, with an increasing number of suits filed against plans holding between $250 million and $750 million in assets, dispelling the once comfortable assumption that only the largest plans attract scrutiny (Encore Fiduciary 2026).<\/p>\n\n\n\n Expanding Frontiers of Exposure<\/strong><\/p>\n\n\n\n The surge is not simply a higher volume of familiar claims. The plaintiffs’ bar has steadily extended ERISA fiduciary theories into new domains, multiplying the categories of conduct that may now generate liability. Forfeiture litigation, which alleges that fiduciaries improperly directed forfeited employee contributions toward offsetting employer contributions rather than reducing participant expenses, has become a principal new front (Mayer Brown 2026). Health plan litigation has grown in parallel, with participants alleging that sponsors failed to monitor pharmacy benefit manager contracts and permitted excessive prescription drug pricing, as in the closely watched actions against JPMorgan Chase and Wells Fargo (Sequoia 2025).<\/p>\n\n\n\n The most striking expansion arrived in December 2025, when a single plaintiff firm filed four class actions targeting employer-sponsored voluntary benefits, marking the first sustained effort to apply ERISA’s fiduciary standards to employee-paid supplemental insurance such as accident, critical illness, and hospital indemnity coverage (Ropes & Gray 2026). These complaints are notable not only for their novel subject matter but for naming benefits brokers and consultants as functional fiduciaries alongside the employers (Holland and Knight 2026). The pleadings allege that broker commissions, in some cases representing roughly 36 to nearly 40 percent of premiums, were embedded in participant costs at levels far exceeding what comparable plans paid (Quarles 2026). By characterizing the employer’s discretionary authority over carrier and broker selection as a fiduciary function, plaintiffs have opened a category of welfare benefits long assumed to fall outside ERISA’s reach (Holland and Knight 2026). Each new theory broadens the population of sponsors who can no longer regard themselves as safely beyond the litigation perimeter.<\/p>\n\n\n\n The Structural Durability of the Trend<\/strong><\/p>\n\n\n\n A central question for any sponsor weighing risk management is whether the present surge reflects a transient cycle or a durable shift. The evidence points firmly toward the latter. Analysts observe that contemporary ERISA litigation is driven less by recurring market events and more by a long-term transformation in how plaintiff firms identify and prosecute claims (Miller Shah 2026). The economic logic is self-sustaining. Because so many cases survive early dismissal and resolve through settlement, and because settlements have been both frequent and substantial, plaintiff firms retain a powerful incentive to file copycat actions, since only a fraction need succeed to render the overall enterprise profitable (Mayer Brown 2026). The settlement record reinforces the point: 2025 alone saw eleven ESOP settlements ranging from $450,000 to $84 million, a ghost network health plan claim against Cigna resolved for nearly $6 million, and prior years featured resolutions such as the $69 million UnitedHealth Group settlement concerning imprudent target date fund selection (Encore Fiduciary 2026; Higginbotham 2026). So long as this leverage persists, the filing pace is unlikely to abate.<\/p>\n\n\n\n Personal Liability and the Inadequacy of Default Protections<\/strong><\/p>\n\n\n\n The case for insurance rests not only on the frequency of litigation but on the severity of its consequences for individuals. ERISA permits fiduciaries to be held personally liable to restore plan losses and to disgorge profits obtained through improper use of plan assets, placing the personal assets of committee members, trustees, and executives directly at risk (Higginbotham 2026). Two common assumptions leave sponsors dangerously exposed to this liability.<\/p>\n\n\n\n First, sponsors frequently conflate the statutorily required ERISA fidelity bond<\/a> with protection against fiduciary claims. The two are unrelated. The Department of Labor requires plans with more than $100,000 in assets to carry a bond<\/a> equal to the lesser of 10 percent of plan assets or $500,000, rising to $1 million for employee stock ownership plans, but that bond protects the plan against theft and dishonesty by those handling its assets; it provides no defense against a breach of fiduciary duty claim (CLA 2025). Second, sponsors often presume that corporate directors and officers or errors and omissions policies will respond to an ERISA claim, when in fact most such policies specifically exclude ERISA matters (GAWDA Media 2026). If a fiduciary is sued for breach, no other form of liability coverage will answer; only fiduciary liability insurance will (Higginbotham 2026).<\/p>\n\n\n\n The Case for Fiduciary Liability Insurance<\/strong><\/p>\n\n\n\n Fiduciary liability insurance is designed to fill precisely the gap that bonds and conventional corporate policies leave open. It protects both plan decision makers and the sponsoring employer by funding defense costs and indemnifying settlements or judgments arising from ERISA liabilities and administrative errors in plan management (NAPA 2025). Given that discovery alone can cost millions before any liability determination, the defense cost coverage is itself a substantial benefit independent of any ultimate judgment (Encore Fiduciary 2026). A sophisticated fiduciary liability insurance policy also addresses exposures that generic policies neglect, such as liability for equitable relief under ERISA Section 502(a)(3), which many carriers do not affirmatively cover and which the Cigna ruling demonstrated can attach to conduct previously thought administrative (Encore Fiduciary 2026). The protection further serves a governance function, since extending coverage to committee members and trustees makes qualified individuals more willing to serve in fiduciary roles (CLA 2025).<\/p>\n\n\n\n That this coverage is increasingly valuable is reflected in the hardening of the market itself. Insurers have written more than a billion dollars in fiduciary settlement checks in recent years, with the consequence that fiduciary liability insurance has become more difficult to qualify for even as the need for it intensifies (GAWDA Media 2026). A tightening market is not a reason to forgo protection; it is a signal of how acutely carriers themselves perceive the risk that sponsors face. The detailed treatment of the subject in industry literature, including a Chubb special report authored with the Groom Law Group examining the pivotal role of insurance in protecting fiduciaries, underscores that this is now a mainstream governance concern rather than a peripheral one (Chubb n.d.).<\/p>\n\n\n\n Counterweights and Residual Uncertainty<\/strong><\/p>\n\n\n\n Intellectual honesty requires acknowledging that the litigation environment contains genuine countervailing forces. Sponsors today defeat these lawsuits more often than in the past, and the Department of Labor has shifted from a pro-plaintiff posture toward a pro-system orientation, filing amicus briefs that side with defendants in forfeiture matters (Mayer Brown 2026; Encore Fiduciary 2026). Legislative reform, such as the proposed ERISA Litigation Reform Act and the Supreme Court’s grant of certiorari in Anderson v. Intel to clarify pleading standards, may yet temper the filing pace (Gibson Dunn 2026). Yet these developments cut in favor of fiduciary liability insurance rather than against it. Each introduces uncertainty about how courts will rule and how the law will evolve, and uncertainty is the precise condition that insurance exists to manage. A sponsor cannot know in advance whether its conduct will be vindicated, and the cost of defending even a meritless claim through the pleading stage is borne regardless of the eventual outcome.<\/p>\n\n\n\n The data establish that ERISA fiduciary litigation has surged to record or near record levels, that the trend is structural rather than cyclical, and that the categories of liable conduct and exposed defendants continue to widen. Against a backdrop in which fiduciaries face personal liability, in which statutory bonds and conventional corporate policies provide no relevant protection, and in which even a successful defense imposes a substantial cost, fiduciary liability insurance is no longer a prudent option but a fundamental element of sound plan governance. Plan sponsors who treat such insurance coverage<\/a> as optional misapprehend both the scale of the risk and the limits of every other protection available to them. Keep up with “all things ERISA” on our blog<\/a>.<\/p>\n\n\n\n