Fiduciary Responsibility, or Fiduciary Duty, refers to the responsibilities that you and your employees are lawfully required to perform. Some of the Fiduciary Responsibilities that you, as a business owner, are obligated to follow include:
- The Duty of Care: making smart and prudent decisions
- The Duty of Informed Judgement: keeping yourself informed so that you can make wise decisions
- The Duty of Disclosure:disclosing important information to the appropriate people
- The Duty of Confidentiality:protecting all confidential information
- The Duty of Loyalty: acting in the best interest of your business and those you work with
Everyone in a company has responsibilities, but you will be held to a higher standard if you in a position of power. That’s why you need to make certain that you do all you can to uphold your Fiduciary Responsibility.If you choose to act against your Fiduciary Responsibilities than you are in breach of them and you will be held accountable for your actions. In this event, you will want to make sure that you have liability insurance.
- If someone in your company a partner, director, shareholder, or even an employee – suspects a breach in Fiduciary contract, they can take you to court. All they need is some form of proof that you didn’t live up to your side of the agreement. If they can prove a breach in duties in court, you will have to pay for any loses that your accuser, or your business, have sustained.
It is possible to alter your Fiduciary Duties with a written agreement, but your changes still have to be approved under state law. You’ll need to sit down with a professional to make sure that your new agreement falls under these requirements.
We mentioned earlier that you need to make sure that you have liability insurance. However, you need to understand that breaches in Fiduciary Responsibilities may not be covered under your general liability insurance. Add this to the list of the questions you ask your insurance company. No matter the size or type of company you own, you need to make sure that you’re Fiduciary Duties are covered.
The professionals at SOGO want to make sure that our clients are protected against unforeseen futures. That’s our priority. Contact us today if you have any questions about Fiduciary Responsibilities and how to protect yourself against breach claims.