Employee Benefits Liability Insurance

Insurance Policies to Consider For Employee Benefits Liability

How Employee Benefits Liability Insurance Works



Suppose a new employee joins a company, and the HR manager forgets to enroll the new employee in the health plan. The new employee then gets into an accident. The employee benefits liability is very useful in this situation and can help the company cover this mistake.

The company can use it to reduce the exposure of the business from failing to enroll the employee in the medical benefits plan of the company. This coverage also ensures that employers are protected from certain affordable care acts.  

Example of Employee Benefits Liability Claim 

Benefits administration involves many different prospects. The people involved need to first explain the benefits to the employees, enroll them in plans, and add or remove beneficiaries. They also have to keep accurate records.
 

As humans, most people tend to make mistakes. Some of these mistakes are inevitable when managing a large workforce. However, they can also lead to huge losses for the business. As a result, it is essential to exercise care and ensure that any mistakes are avoided as much as possible.

For example, suppose you own a real estate management business and have hired a new employee by the name of Tim to do maintenance work for you. All the necessary paperwork has been done to enroll the employee into the company-sponsored health plan. However, the human resources manager makes an error, and Tim is somehow not enrolled, a fact that is discovered much later.

During this period, Tim falls ill and is hospitalized. He later finds out that he has no health insurance. When it's time to pay his medical bills, he files a lawsuit against your company and the HR manager to reimburse his costs. In this case, the company can use employee benefits liability coverage, which can be added to the general liability policy through endorsement.

Benefits Covered In Employee Benefits Liability Insurance

There are many benefits that are covered by EBL insurance. Some of these are listed below:

• Dental insurance
• Disability insurance
• Life insurance
• Worker’s compensation policy
• Social security benefits
• Maternity leave
• Health insurance
• Retirement plan benefits
• Vacation benefits
  

Why Do You Need Employee Benefits Liability Insurance? 

We are all humans, and we all make mistakes. However, we would never want these mistakes to lead to huge monetary losses, which is why we need employee benefits liability insurance. 

Costs of Employee Benefits Liability Insurance 

The costs of EBL insurance policies vary greatly from country to country. At the end of the day, it depends entirely on the number of employees covered in the policy. In order to find an employee benefits liability insurance policy within the required budget, you will have to get in touch with a reputable insurance provider so that they can get you a customized quote, based on which you can then decide which one works for you.

Employee Benefits Liability Insurance Versus Fiduciary Liability Insurance



Employee benefits liability coverage is often confused with fiduciary liability coverage. However, they aren’t the same thing. There are some similarities that they share, though.

Employee benefits liability insurance is specially designed so that employers can, at all times, be protected from certain errors that they make, which can cost them. 

Fiduciary liability insurance is insurance that is designed so that employers can be protected from wrongful acts against the provisions of the Employee Retirement Income Security Act. The coverage of fiduciary liability is much wider than that of an EBL policy. 

Employee Benefits Liability Insurance in New Mexico 

In New Mexico, Employee Benefits Liability Insurance usually covers these types of claims:

• Third-party Over Actions: Here, another party that was mainly held accountable for the injuries of your employees files a lawsuit against your company. For example, if a worker in your company was injured due to equipment that you had not maintained properly, then, in that case, the worker can sue the company that made the equipment, who can then sue for your negligence.
   
• Loss of Consortium: The spouse of an injured employee at your company can file this lawsuit.
  
  
• Dual Capacity Suits: The dual capacity principle defines a business as more than just an employer to an employee. It may also be the provider of a service, product supplier, or owner of business premises. Thus, if an employee gets injured as a result of one of these relationships, the employee may be able to sue the business. 
  
  
• Consequential Bodily Injury: This is filed when someone from the employee's family gets hurt due to the employee's injuries. 
  

Costs of Employee Benefits Liability Insurance in New Mexico

Employee benefits liability insurance in New Mexico costs $1.35 per $100 covered in the payroll. This is based on many different factors, including the payroll, location, number of employees, industry factors, risk factors, coverage limits, and the claims history.
 

In New Mexico, business owners need to first compare quotes from private insurance companies. They can also use the online insurance marketplace to compare quotes and then go ahead with the one that gives them the best rates for this. 

If a firm has a very high-risk status, then it can become quite difficult to purchase a policy this way. So, in this case, an assigned risk pool can be used to get the coverage that is needed. Many businesses that are new in the market go for this procedure till they have a track record that makes it easy for them to apply for insurance in the commercial market.
 

If you are a business owner in New Mexico, we strongly recommend getting Employee Benefits Liability Insurance to protect yourself from unexpected monetary losses.