Overview
An ERISA fidelity bond, often shortened to ERISA bond, protects an employee benefit plan against losses caused by fraud or dishonesty by the people who handle plan funds. The federal Employee Retirement Income Security Act requires that every person who handles plan assets be bonded, and the bond must protect the plan itself, not the individual or the employer.
Under ERISA the required bond is generally at least 10 percent of the plan funds a person handles, with a floor of $1,000 and a cap of $500,000 for most plans (the cap rises to $1,000,000 when the plan holds employer securities). Because the requirement comes from federal law, the bond amount tracks the plan's assets rather than the company's risk profile.
The bond is fidelity coverage: it reimburses the plan for theft. It is not a surety bond, and it does not cover investment losses or fiduciary breaches, which are handled by separate fiduciary liability insurance.
Who needs this bond
Plan sponsors, trustees, and administrators of any ERISA-covered retirement, health, or welfare plan, including 401(k), pension, and self-funded health plans.
Typical amount and term
Bond amount must be at least 10 percent of plan assets handled, with a 1,000 dollar floor and a 500,000 dollar cap (1,000,000 dollars for plans holding employer securities).
What this bond costs
Your premium is a small percentage of the bond amount, set by underwriting. The biggest drivers:
- The amount of plan funds handled, since the bond must be at least 10 percent of that amount
- The number of people who need to be covered
- Whether the plan holds employer securities, which raises the statutory cap
- The bond term, since multi-year bonds can lower the annual cost
| Scenario | Bond amount | Estimated premium |
|---|---|---|
| Plan handling $100,000 | $10,000 (10 percent minimum) | around $100 per year |
| Plan handling $1,000,000 | $100,000 | around $200 to $400 per year |
| Larger plan at the statutory cap | $500,000 | often a few hundred dollars per year |
Figures are illustrative premium ranges, not quotes or statutory amounts. Your rate depends on the bond amount your obligee requires and your underwriting profile.
What you will need
- Plan name, EIN, and most recent Form 5500 asset figure
- Name and address of the plan sponsor
- Whether the plan holds employer securities
How to apply
- Tell us your plan asset total and any employer securities exposure
- Receive an instant quote at the 10 percent statutory amount
- Bond issued same day; sponsor names the plan as insured
How a surety bond differs from insurance
An ERISA fidelity bond protects the plan against dishonesty by those who handle its assets. Fiduciary liability insurance is different: it protects the fiduciaries themselves against claims that they mismanaged the plan. Many plans carry both, because they cover different exposures.
Frequently asked questions
Who needs an ERISA bond?
Every person who handles funds or other property of an employee benefit plan covered by ERISA generally must be bonded, including plan officials and certain service providers.
How much coverage does ERISA require?
The bond must be at least 10 percent of the plan funds handled, with a $1,000 floor and a $500,000 cap for most plans. The cap rises to $1,000,000 if the plan holds employer securities.
Is an ERISA bond the same as fiduciary liability insurance?
No. The bond protects the plan against theft. Fiduciary liability insurance protects the fiduciaries against claims of mismanagement. They are separate coverages.
Can I buy a multi-year ERISA bond?
Yes. Multi-year ERISA bonds are common and can reduce the per-year cost while keeping the plan in compliance.
More fidelity bonds
Reviewed by the Cornerstone Surety bond team. Last reviewed 2026-06-17.