Administrating employee benefits carries an extremely high duty of care. Errors in benefits administration could cause employees to experience serious consequences and expose employers to considerable liability. Employee Benefits Liability Insurance helps to protect companies from considerable liability and gives them a means to remedy errors. Here are some of the most important things that employers should know about insuring this part of their human resources management.
EBL coverage proceeds can address the immediate economic hardship that an employee incurs as the result of errors in benefits administration. Claims under this type of policy could compensate individuals with the value of key benefits such as medical expenses incurred due to a health insurance termination error or short term disability enrollment omission.
While many employers outsource benefits administration along with other HR functions, this does relieve them of liability for claims involving the mishandling of benefits.
Benefits are a critical element of compensation. If employers had to bear direct financial liability associated with benefits, the risk of offering them could simply be too great. Insurance coverage for employee benefits is a valuable risk mitigation tool that enables employers to compensate their team members with vital resources such as healthcare, retirement savings account contributions, and paid time off.