To gain a competitive advantage, your business needs the right people. Often, getting the right people requires more than an attractive paycheck. Benefits like health insurance and retirement plans are tried and true measures employers take to attract and retain good staff.
Employers and managers have a fiduciary role in the administration of such benefits, and if mistakes are made, it can prove costly to the employee and, ultimately, the business.
Consider this example: a new hire is supposedly enrolled by the business’s manager in the company’s health insurance plan. Months after beginning employment, the new hire is hospitalized and discovers at that time that, due to a clerical error made by the manager, the health insurance enrollment was never completed. Thousands of dollars in uninsured medical bills pile up, and the employee is left with no choice but to sue the business for the financial damages resulting from the manager’s error.
Such errors are not covered by a business’s standard general liability (GL) insurance policy. Insurance for “employee benefits liability” is available to address such scenarios and may be obtained either as an amendment, or “endorsement,” to the GL policy or as a separate insurance policy, typically called “fiduciary liability.” With the potential costs of a mistake on an employee benefits plan, all employers offering health and life benefits should obtain this protection.