Every business must hire employees if they want to grow and become more successful, but each time a new employee is hired, the hiring company takes on risks. One of these risks is the potential of a lawsuit if the employer is negligent in providing employee benefit plans or makes an error when administering such plans. Adequate employee liability coverage can help protect employers from facing the full financial repercussions of negligence in the administration of employee benefits.
What Does Employee Benefits Liability Cover?
While there may be subtle differences in coverage options, most employee benefits liability policies cover the following:
- Errors or omissions (including failing to inform employees of available benefit programs)
- Negligent acts in regard to employee benefits
coverage can protect your business in the event that claims for damages are brought against you or a manager you are legally responsible for by an employee. Claims that are not covered by employee benefits liability coverage include insufficient funding claims and claims based upon advice to participate in an employee benefit plan by an insured individual. Additionally, employee liability coverage does not extend to claims based upon investments that do not perform as advertised by an insured.
If your insurance policy does not currently include employee benefits liability coverage, talk to an insurance company today about adding this important financial protection to your current policy.