Employee benefit insurance is coverage an employer can purchase to protect claims made by employees over administrative errors or omissions regarding their group insurance coverage, pension plans, stock options, and other benefits. For example, if a new employee requests to receive medical insurance through the employer and the employer failed to add the new employee to the plan.
Coverage of this exposure is usually provided by endorsement to the general liability policy but may also be provided by a fiduciary liability policy.
This coverage applies to a wide range of employee benefits including health, life and disability insurance, retirement plans, and other benefits offered through plans administered by the employer.
Employers can be held liable for errors in the administration of their employee benefit programs, even for honest mistakes.
If the employer’s liability insurance includes employee benefit liability coverage, the policy can pay for the mistake.