3 Common Liabilities Employers Face In Benefits Administration

One of the most common ways that employers remain competitive today is to provide employees with comprehensive benefits. But when it comes to these types of policies, companies are also facing increasing employee liability for being negligent in administering the plans, which is why it’s critical to have good employee benefits liability insurance. Here are three common areas where liability is likely to arise.

1. Benefit Extension Upon Termination

If you have the unfortunate situation where you need to terminate an employee, the terms of severance often include extension of benefits. In cases where an employer is not able to successfully negotiate the severance terms with a former employee, the employee may decide to sue for wrongful dismissal, and may include lost wages and benefits in the claims. With good employee liability insurance, you can protect against your own risk and exposure during these claims.

Employee liability 2. Misrepresenting Benefits to Employees

Whenever you have a new employee, or a new benefits package for existing employees, you do your best to explain it properly and accurately. However, in some cases you may not be able to clearly communicate the policy inclusions and limitations, or you may have inaccurate information for your vendor. In either case, if an employee feels you have misrepresented the benefits and suffers financial or other losses as a result, you may need an employee liability policy to help protect your company.

3. Unpaid Premiums

When you promise your employees that you will provide a benefit, you are bound to provide what you have described. If you fail to do so because you don’t pay for the premiums, or you pay the wrong amount, you could be liable to your employees when the coverage drops.

In order to prevent these scenarios from happening at your business, find a comprehensive employee liability policy that will mitigate your risk and help you meet employee expectations for benefits.