As an HR professional, you play a crucial role in managing your organization’s workforce and ensuring employee well-being. While risk management often handles insurance coverage, there is a specific liability insurance you should be aware of—Employee Benefits Liability Insurance.
Protecting Against Errors in Employee Benefits Administration
Employee Benefits Liability Insurance is a claims-made professional liability policy that protects against damages due to negligent acts, errors, or omissions in the administration of employee benefits. Examples include issues like missing enrollment deadlines or improperly terminating an employee’s benefits, both of which could expose your organization to legal claims and significant financial liabilities.
Example of a Claim: The Importance of Accurate Enrollment
Imagine a scenario: a new employee wasn’t enrolled in the life and health insurance plan. Following a serious accident, they find themselves without medical coverage due to this oversight. Today, insurance carriers do not permit retroactive premium payments for coverage, meaning the employee would be left with substantial medical expenses. Without employee benefits liability coverage, this oversight could lead to a lawsuit against your organization.
Ensuring Comprehensive Coverage
While insurance may not be under your primary responsibility, it’s worth reaching out to your risk management team to confirm that Employee Benefits Liability Insurance is part of your organization’s insurance portfolio. Taking this proactive step can safeguard your company against costly claims and protect your employees in the event of an administrative error.
Contact Us
If you or anyone from your risk management department has questions about Employee Benefits Liability Insurance, please feel free to reach out to me. I am here to help ensure your organization has the necessary protections in place.
