benefits payable exclusion
A standard exclusion in fiduciary liability policies precluding coverage
for claims involving payment of benefits owed to a claimant, if monies are available
within the plan to make such a payment. For example, assume that as a result
of a lawsuit or settlement, a claimant is entitled to specific amounts of money
held within an insured's pension plan. If such monies can be paid from the plan,
it is not the intent of a fiduciary policy to make such payment, because this
would have the effect of covering a business risk. On the other hand, if a claimant
were to assert a valid claim against a now-defunct or insolvent plan (from which
no, or only limited, funds were available), this exclusion would not preclude
payment in such circumstances.
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PLI XII.E