Preparing For Errors in Benefit Administration

Employee benefits sometimes play a big role in a new employee’s decision in joining a company. He or she trusts that those benefits go into effect immediately and that those protections are there when they need them. However, what happens if an employee realizes their dental insurance isn’t going through at their next trip to the dentist? They have all the right to file a claim against you. Here is where employee benefits liability insurance can help.

What is This Liability?

Employee benefits liability insurance kicks in when an error or omission occurs regarding benefits. This can include accidentally forgetting to add a new employee to a plan, erasing or mismanaging records or misinforming an employee about details of their plan. Depending on your insurance plan, this liability coverage can handle the expenses of lawsuits or cover the benefits an employee should have received.

While you and your agency are drafting an insurance contract, make sure your employee benefits liability insurance covers the types of benefits you offer. You don’t want to exclude incidents involving life, disability, tuition plans and pension plans if you have them.

It is also important to note that this liability is typically not included in commercial general liability plans. Therefore, it is imperative to obtain this coverage from a trusted agency as soon as possible.