What is Employee Benefits Liability Coverage?
Many companies offer benefits to their employees. Taking care of your employees can help set them up for success. However, sometimes mistakes and accidents can happen in regard to employee benefits. Errors can result in lawsuits, headaches, and potentially financial distress. Having employee benefits liability coverage is one way to help protect your business.
What exactly does it cover?
Employee Benefits Liability Coverage helps protect your business in incidents surrounding the management of employee benefits. Typically, these claims against your business are filed by the employees about the way your company has managed their benefits. This could include:
- Enrollment issues
- Cancelation and termination of benefit plans
- Workers comp complaints
- Medical insurance issues
- The handling of employee records
- The interpretation of benefits
- And more
When does Employee Benefits Liability Coverage come in handy?
This type of coverage can help protect your business from incidents concerning employee benefits. While hopefully your business will not have any hiccups, it’s a good way help ensure the wellbeing of employees.
For example, let’s say one of your employees enrolls in a company-sponsored health plan. They do all the necessary paperwork and filings to get be enrolled. However, your business makes a mistake in completing the enrollment due to a clerical error. Now, your employee unknowingly does not have healthcare coverage. If they get hurt on and end up at the hospital, they could be facing a huge medical bill because your company failed to properly manage their health plan. If your employee makes a claim against your business for this error, then Employee Benefits Liability Coverage could be beneficial.
How does EBL coverage work?
EBL works on a claims-made basis. It can help cover claims made within the claims period. Any claims made after the coverage period are not covered. Usually, there is a retroactive date. This is the date where coverage begins. There may also be an option to purchase an extended reporting period (ERP). The ERP length can vary, so it’s important to discuss that option with your insurance agent.
What does it exclude?
EBL does not cover everything. If you have additional question about exclusions, talk to your agent about the specifics of your own policy. However, some common exclusions include:
- Fiduciary liability
- Breach of Contract
- Bodily Injury
- Property Damage
- Insufficient funds to pay benefits
Who needs this coverage?
EBL coverage can be helpful to employers who:
- Offer benefits to employees
- Have employees who manage the benefit programs
- Offer many different benefits
- Have many employees or a high turnover rate
Talk to your insurance agent to see if your business could benefit from EBL coverage. If you have only a few employees, or you do not offer benefits, then it may not be a useful coverage for you. Your agent can also help you figure out what coverage limits work best for your business.
If you are thinking about Employee Benefits Liability Coverage, the best thing to do is call up your insurance agent. They can help you figure out what coverages you need to help protect your business and its employees. They are also there to help address your questions or concerns.