Our last blog post defined what employee benefits liability insurance is and explained how the policies are structured. In this post, we want to share some examples of how this coverage applies to charter schools and how much this policy costs.
Employee Benefits Liability Coverage
The definition of the word administration usually determines the types of errors covered by an employee benefits liability policy. This term generally applies to acts, errors, or omissions in:
- She described the benefit plans and eligibility rules to employees, other eligible family members, and beneficiaries. Example: A benefits manager mistakenly tells an employee that her coverage in the employer-sponsored health plan starts in 30 days when it doesn’t start for 60.
- They maintain files and records related to employee benefits, whether the records are electronic or paper. Example: A benefits worker accidentally erases an employee’s electronic file or loses their paper file.
- They enroll, maintain, and terminate employees, eligible family members, or beneficiaries in benefit plans. Example: A benefits worker fails to add an employee’s beneficiary to a life insurance plan provided by the employer.
Covered Benefits
What constitutes “employee benefits”? This term generally includes the following:
- Insurance Life, accident, dental and medical, and other types of insurance
- Plans Pension, profit sharing, stock ownership, and savings, and other plans
- Benefits Social security, workers compensation, disability, and unemployment benefits
- Additional Tuition assistance, maternity leave, etc.
Employee Benefit Liability Limits
Employee Benefits Liability coverage usually includes two separate limits. The Each Employee limit is the most the insurer will pay for any one employee, their family members, and beneficiaries. The Aggregate limit is the most the insurer will pay for all acts, errors, or omissions.
Employee Benefits Liability Exclusions
Employee Benefits Liability coverage typically excludes claims resulting from poor financial advice or performance predictions. Suppose a benefits worker tells an employee that the company’s 401K plan will generate a 400% return in one year. If the employee sues the benefits worker because his prediction did not pan out, the claim will not be covered. Other exclusions include Fraud, Breach of Contract, Bodily Injury and Property Damage, Employment-related Practices, and Insufficient Funds (to pay benefits.). This is not a complete list of exclusions. Employment-related practices include acts like discrimination, sexual harassment, and wrongful termination.
Employee Benefits Liability Insurance Cost
The cost of employee benefits liability insurance is usually pretty cheap. For most charter schools, the annual cost of this coverage is between $250 to $750 per year for a $1,000,000 limit.
If you would like to find out how to add employee benefits liability insurance to your current policy, or if you would like to find out how to obtain a separate policy, please get in touch with our office.