Liability coverage included in a business insurance policy is hardly a catch-all for your staffing insurance needs. General liability plans–as well as errors and omissions policies or endorsements–provide for coverage against claims by third parties, typically customers or clients.
Glaringly absent is any coverage against claims by a firm’s own employees, both temporary and full-time. One of the biggest risk exposures occurs in the administration and dispensation of employee benefits plans. The addition of employee benefits liability insurance is crucial to ensure a company is protected against all such claims of liability.
Typical Claims Scenarios
Covered employee benefits plans include health insurance, pensions, 401k plans, disability, workers compensation and tuition programs. Below are some of the more common claims scenarios:
A new employee is diagnosed with cancer six months into his employment, only to discover that due to an oversight, he was never enrolled in the company health plan.
An administrator advises an employee that a non-immediate family member is eligible for coverage on a health insurance plan–when in fact he or she is not.
An employee asks an administrator to change the beneficiary on his life insurance plan, and the company official inadvertently does not.
An administrator accidentally deletes or misplaces an important employee file.
What It Covers
Employee benefits liability insurance provides payment for legal defense and fees, as well as any settlements that may be awarded, up to the terms of the policy. It does not include defense of fraudulent or criminal acts.