What Is Employee Benefits Loss Coverage?

When you offer benefits plans to employees, you incur a risk associated with the management of the plans. Outsourcing that management might mean sharing liability with the firm you pick, but it does not mean outsourcing that liability. Most companies manage these risks with fiduciary bonds to protect against liability related to fraud, but what about honest errors that nonetheless expose you to the cost of damages? To protect against those risks, you need an employee benefit loss exposure policy, which is specifically designed as a benefits administration E&O insurance plan.
What Benefits Programs Can Be Covered?
Not every kind of employee benefit program needs or benefits from EBL coverage, but the ones that do are the ones that carry the most risk to you if you are liable for damages to employees. Coverage extends to all these policies:
• Group life, disability, dental, health, or accident insurance
• Unemployment, workers’ compensation & social security benefits
• Self-directed retirement plans under employee control, including IRS qualified pensions, 401k plans and stock investment plans or profit-sharing plans available to all full-time employees
Benefits available only to certain levels of leadership and those that are not placed under the employee’s direction are usually not covered by programs like these, so you will need to seek out additional coverage options if you offer any uncovered benefit types. Contact a provider today to get a quote on employee benefit loss exposure coverage so you can learn more about coverage specifics.