Understanding Employee Benefits Liability

Because employee benefits liability is one of the more confusing topics businesses will cover, you must remember that you need coverage and should consider these liabilities. Read further to learn what can be done to protect your business and ensure that your benefits programs are managed properly.  

What Are the Limits of an Employee Benefits Liability Policy? 

An employee benefits liability (EBL) policy is designed to protect businesses against errors or omissions that might occur in the administration of the benefits plan. While it’s possible that an honest mistake could happen now and then, there are times when these honest errors get out of control. 

Moreover, you are bound by federal law to ensure that the plan is managed properly. Your insurance policy can both provide you with a legal defense and protection against several liabilities, judgments, or fines that may be levied.  

What Are Aggregate Limits? 

When you purchase an EBL policy, you are choosing between aggregate limits and employee limits. Aggregate limits are the combined limits of all the things that might have occurred each year under your benefits plan. Therefore, errors or omissions on several employee’s plans are combined and covered until they reach the limit of the policy. 

What Are Employee Limits? 

Employee limits are tied to a singular employee’s benefits plan. Therefore, you may purchase coverage with a limit for each policy. You must, then, decide if an aggregate policy or an employee policy is appropriate for your business. 

Contact the Dale Group for More Information on Employee Benefits Liability

Reach out to our team at the Dale Group at any time if you have questions about employee benefits liability. We understand that this can be a tricky part of administering your plan, and we are here to help. By tackling these issues one step at a time, you will find it easy to offer your employees the benefits they deserve and ensure that these benefits are always active.