Businesses need all types of insurance coverages. One of these important coverages is employee benefits liability insurance. This type of insurance covers any claims made due to errors in your employee benefits.
What Employee Benefits Liability Insurance Covers
While some insurance plans may vary from one to another, there are some main components of EBL insurance.
Coverages often include the following mistakes:
- A benefits manager mistakenly describes benefit plans and eligibility rules
- A benefits worker accidentally loses a file or erases an electronic file
- A clerical error leads to someone not being enrolled in a health plan
Errors do happen. Employee benefits liability insurance pays out damages when your business is legally obligated to pay due to these types of errors or omissions. Even if you want to think that an error won’t happen, it is always better to stay on the safe side.
What Employee Benefits Liability Insurance Does Not Cover
There are exclusions with EBL insurance. For instance, coverage is not extended to claims that stem from bad financial advice. For instance, if an administrator makes a prediction about the 401k plan and it doesn’t pan out, a suit from the employee is not covered. This type of insurance does not cover mismanagement.
No matter how diligent you try to be, mistakes happen. It is best to be prepared.