This is the latest in a series of posts, always published on Friday, discussing five articles, topics, videos, podcasts, blog posts and the like that crossed my desk during the week just ended. Some weeks, the post has a consistent theme, such as last week when it turned out to be essentially “all ERISA, all the time.” Not so this week, as the topics wander (with great purpose, remembering that all who wander are not lost), from AI to private equity to regulations to ERISA class action litigation to what we can learn from The Princess Bride about the proposal to use 401(k) assets to buy houses.

So here goes nothing, as the saying goes:

1. This is an interesting little post on an insurance product offering increased limits and coverage on AI and agent risks. I like it solely because it illustrates a particular point. There is a lot of discussion out there about the scope of coverage for these types of risks, about increased efforts to exclude them under certain policies, and related or similar issues. As this post shows though, there is also a counter narrative of insurers increasing coverage limits and scope for this type of risk. That’s the great thing about insurance – there is generally always a real market with real competition at play over the availability, nature and scope of various types of coverage. While this is particularly true during the early days of a particular novel risk or new type of coverage, it typically continues over time, with market and competitive forces driving further development of any particular form of coverage, its terms, and the like. As I have mentioned before, EPLI policies and fiduciary liability policies, for example, have evolved substantially in the decades I have been involved with them as either a coverage lawyer or as a defense lawyer for clients covered under them. Adam Smith would think well of the modern market for insurance. The market’s response to AI risks is more proof of that.
2. I don’t believe people really think that a new regulation or substantive guidance from the Department of Labor will fully shield plan sponsors and fiduciaries against litigation and liability risks stemming from adding private equity investments into 401(k) plans. Provide them with more litigation defenses? Sure. Dissuade the class action bar from coming after them where the case is a close call? Definitely. But preclude litigation or eliminate all potential liability where a plan has a big loss from including those investments or in cases where the plan fiduciary didn’t have (or rely on someone who had) a sophisticated understanding of that investment? Absolutely not. And if they tried to write a regulation broad enough to do that? It would be sufficiently contradictory to the actual language of the statute that it would never survive a Loper challenge, if the new Loper standards are applied objectively. Anyway, you can read what is currently known – as opposed to my predictions – about the upcoming regulations in this article, which provides a nice overview of the subject.
3. One of the most famous lines in movie history has to be the line from The Princess Bride, that “you keep using that word [but] I do not think it means what you think it means.” I keep thinking about that line these days with regard to all sorts of proposals to reorient 401(k) plans away from their fundamental purpose, which was to encourage and protect long term retirement savings. Some of their best features – tax deferral and employer matching – are tied directly to this purpose or directly promote it. Lately, it seems like a lot of people are forgetting this point and viewing 401(k)s as simply some other type of savings account or treasure chest to be accessed for all sorts of purposes, such as most recently buying houses. At what point does the 401(k) cease having any discernable purpose that warrants its tax favored treatment if it just becomes another savings or investment instrument for all sorts of uses? At the end of the day, I think many of these proposals come from people who keep saying 401(k) but, as in The Princess Bride, don’t necessarily really understand what that word means.
4. This is a great article summing up the state of ERISA litigation at the end of 2025 and making some predictions as to key issues that will be on the radar screen in 2026. There are two particular things I like about it from a meta or 30,000 foot perspective, even though neither is expressly mentioned in the article. First, it reflects the extent to which two competing themes in ERISA litigation, particularly class action litigation, can be true at the same time – in this instance that ERISA class action litigation, potential plan sponsor exposure and new theories of liability are expanding but, at the same time, courts are in other ways narrowing those risks and exposures. Remember this when you read stories and posts bemoaning only the risks to plan fiduciaries from novel liability theories and the like, without any reference to the countervailing story line. Second, it reflects the extent to which not only class action plaintiffs lawyers – with their novel theories and copycat suits – are pushing the envelope, but also the extent to which judges are constantly revisiting issues in this area of the law, thereby changing the landscape (for instance, see the discussion in the article about jury trials in ERISA cases). This constant give and take is what makes it fun to practice in this area of the law.
5. Insurers and claims administrators don’t have to be right when they decide a claim for benefits under ERISA to prevail in litigation (in most cases, anyway, as this is only true if the benefit plan at issue contains certain magic language, but almost all such plans contain that language nowadays). Their decisions as to whether to grant, or instead deny, benefits just have to be reasonable. As I like to explain it, they are held to a horseshoes standard – they don’t have to hit the post, they just have to get reasonably close and, if so, their decision on a benefit claim stands. At the same time, as a necessary check on this power, they are expected to properly investigate the claim for benefits and communicate accurately with the participant seeking benefits during the processing of a claim for benefits. The expectation that insurers and claims administrators will conduct themselves that way with regard to a claim for benefits has come to be thought of as a procedural obligation on their part in deciding benefit claims. Courts have slowly over time developed a body of case law holding that a denial of benefits that rests on procedural flaws in the investigation and communication by the insurer or claim administrator – regardless of the substantive accuracy or lack thereof of the benefit denial – should be overturned. This issue, which has been slowly developing over the years, at different rates in different circuits, is well discussed in this article addressing a new Sixth Circuit decision taking this approach.