Maryland ERISA Stand-Alone Bond: Everything You Need to Know

If you manage an employee benefit plan in Maryland, you may be required to secure an ERISA Stand-Alone Bond to comply with federal regulations. These bonds protect plan participants from fraud, dishonesty, or mismanagement by fiduciaries.

In my experience, many business owners and plan administrators are unsure about whether they need an ERISA bond, how much coverage they require, and where to obtain one. This guide breaks down everything you need to know to stay compliant and protect your plan assets.

What Is an ERISA Stand-Alone Bond?

An ERISA Stand-Alone Bond is a fidelity bond that protects employee benefit plans from losses caused by fraud or dishonesty committed by fiduciaries. These bonds are required under the Employee Retirement Income Security Act of 1974 (ERISA) to ensure plan participants' funds are safeguarded.

The key characteristics of an ERISA bond include:

✔ Required for most employee benefit plans – Protects against theft, fraud, and dishonesty
✔ Covers fiduciaries and individuals handling plan funds
✔ Must be separate from business liability insurance
✔ Required by the U.S. Department of Labor (DOL)

Without an ERISA bond, fiduciaries risk financial penalties, legal consequences, and disqualification from managing benefit plans.

Who Needs an ERISA Stand-Alone Bond in Maryland?

Maryland businesses that manage or oversee an employee benefit plan must have an ERISA bond.

This includes:

• Employers offering retirement or health plans (401(k), pension, profit-sharing, etc.)

• Third-party administrators (TPAs) handling plan funds

• Fiduciaries responsible for plan assets

• Companies offering health and welfare benefit plans

ERISA defines fiduciaries as individuals or entities who have control over a plan’s assets or decision-making. If you manage, oversee, or have access to plan funds, you likely need this bond.

How Much Coverage Do You Need?

The minimum bond amount required under ERISA is 10% of the total plan assets, subject to the following limits:

• Minimum bond amount: $1,000

• Maximum bond amount: $500,000 (or $1,000,000 if the plan includes employer securities)

For example, if your company’s 401(k) plan has $2 million in assets, you must have a bond of at least $200,000 (10%). However, if the plan includes company stock, your bond may need to be up to $1 million.

Why Is an ERISA Stand-Alone Bond Important?

Many business owners mistakenly believe their general liability insurance or other commercial policies cover ERISA requirements. However, the DOL mandates that ERISA bonds must be separate from other insurance and specifically protect plan participants from fiduciary dishonesty.

Key Benefits of a Stand-Alone ERISA Bond:

✅ Ensures full compliance with ERISA regulations
✅ Provides dedicated protection against fraud and theft
✅ Eliminates coverage gaps that could lead to legal issues
✅ Required by the Department of Labor to avoid penalties

I’ve seen cases where businesses assumed their existing insurance covered them, only to find out they were non-compliant and at risk of penalties. A stand-alone ERISA bond is the safest and most effective way to ensure compliance.

What Happens If You Don’t Have an ERISA Bond?

Failing to obtain an ERISA bond can result in serious legal and financial consequences, including:

❌ Fines and penalties from the Department of Labor
❌ Personal liability for fiduciaries responsible for plan assets
❌ Disqualification from managing future benefit plans
❌ Lawsuits from employees or plan participants

Since ERISA bonds are relatively inexpensive, it’s a small investment to ensure compliance and protection.

How to Get a Maryland ERISA Stand-Alone Bond

Step-by-Step Process

1️⃣ Calculate your bond amount – Determine 10% of plan assets to find your required coverage.
2️⃣ Find a U.S. Treasury-listed surety provider – Only bonds from approved providers meet ERISA standards.
3️⃣ Complete an application – Basic details about your company, plan assets, and fiduciaries are required.
4️⃣ Get your bond issued – Once approved, you’ll receive your bond to keep on file for compliance.

Most businesses can get an ERISA bond issued quickly, often the same day, with minimal paperwork and no credit check for smaller bond amounts.

Common ERISA Bond Myths – Debunked

I’ve come across several misconceptions about ERISA bonds over the years. Here are some of the most common:

🚫 “My business insurance covers ERISA requirements.”
✅ Fact: ERISA bonds must be separate from commercial insurance.

🚫 “I don’t handle plan funds, so I don’t need a bond.”
✅ Fact: If you have decision-making authority, you still need a bond.

🚫 “Only large companies need an ERISA bond.”
✅ Fact: Even small businesses with employee benefit plans must comply.

🚫 “I won’t get caught if I don’t have a bond.”
✅ Fact: The Department of Labor regularly audits businesses for ERISA compliance.

Why Work With Us?

Based on my experience helping businesses with ERISA bonds, I’ve found that the process can be confusing, and many companies struggle to find a provider that offers fast, reliable service. That’s why we make it as easy as possible to get your bond quickly and affordably.

What You Get When You Work With Us:

✔ Fast Approvals – Many bonds issued the same day
✔ Competitive Rates – Affordable pricing with no hidden fees
✔ Trusted Surety Providers – Backed by A-rated carriers
✔ Expert Assistance – Help from professionals who understand ERISA regulations

If you need a Maryland ERISA Stand-Alone Bond, we can help. Let’s make sure you stay compliant and protect your employee benefit plan.

👉 Get a free quote today!