When it comes to being an employee and protecting your employees, one of the most important things to have as a business owner is employee benefits liability insurance. Today, we are going to spend some time diving a little deeper into this topic and what you need to know!

Employment and being an employer right now is incredibly tricky, especially right here in the Lowcountry. Companies across all professions are feeling the weight of being very understaffed and employees are more exhausted than ever before tiring to keep up with the extra strain that is being put on them. Fighting for security, benefits, a good salary, and insurance across the board is what is inspiring these exhausted employees to stick around. Keeping these benefits protected and insured is becoming the primary focus for many businesses across the Lowcountry, and we are here to help. It is our job at Abri insurance to figuring out how to best cover your employees while still giving you room in your budget to grow your business, together!

What To Know About EBL

Employee Benefits Liability (EBL) insurance is coverage that helps businesses with errors and omissions that happen when employee benefit plans are administered. It covers damages that the insured company becomes obligated to pay due to an error or admission made in administrating an employee’s benefits. These benefits are things like life insurance, medical insurance, disability insurance, and retirement plans. A better benefits package offered to potential employees can attract the perfect employee or keep the perfect employees working for you. However, any error in properly providing and informing employees of all of their benefits, signing them up correctly, and offering everything to them that they are eligible for can lead to some very unhappy employees and potential lawsuits. While many of these errors are human errors, they’re still huge errors that if not covered properly could end up with a severely injured employee without the coverage they need and a lawsuit coming your way. These lawsuits and other financial responsibilities that arise from this situation could potentially financially destroy your company, but with EBL, you will be able to help your employee and still keep your doors open.

One of the many benefits of EBL is that it covers not only the main benefits offered to an employee, but also fringe benefits like dental, profit-sharing plans employee stock plans, and much more. It is also technically sold as a stand-alone policy. However, when you are in the market to purchase an EBL, make sure the plan you choose covers the benefit plans that your specific company offers. Not all benefit packages are created the same, which we all know and recognize. Outside of the benefits we’ve already mentioned, employee benefit programs include accident insurance plans, pension and savings plans, social security, workers compensation, unemployment benefits, maternity leave, tuition assistant, and vacation plans. While not every company will offer all of these benefits and while not every employee will want or use each of the benefits offered to them, they will be important to your employees and many will need this coverage to survive, remain healthy, and live to the fullest. These benefits are important to your employees, so these benefits need to be important enough to you to get the proper coverage to protect what is rightfully owed to your employee and to protect your company along the way. Make sure when buying insurance from Abri or your insurance company of choice, that you take the time to sit down and explain all the benefits you need to be protected and covered through with EBL.

Please note that almost all EBL endorsements give coverage on a claims-made basis, which means these endorsements cover claims made during the policy period that was given to your employees. If claims are made outside the policy period then they won’t be covered. While you’re thinking that this might add even more of an expense to the insurance policies you already have, it can save you money and help your company in the end. If your company offers any kind of benefits to your employees, if you have a high employee turnover rate, if someone (an employee) beside you handles the benefits offered to all of your employees or you offer different benefits to each employee, then it is very important to EBL insurance. It is also important to know, as a business owner, that this type of policy only covers legally required and optional employee benefits. In this case, health insurance is not always legally required for companies to offer their employees. The Affordable Care Act specifies that employers with over 50 full-time employees provide health insurance.

Health insurance often gets targeted for benefit claims. While this type of policy will cover some of these costs, it’s important to remember it won’t cover all of them. These policies also insure against claims made by both current and former employees. These plans will have certain deductibles and will cover a specific amount incurred by current and former employees. When doing your research on how much these policies could cost you, the cost will vary based on multiple things, but mainly on how many employees you are planning to cover with this policy will determine the final price. Rest assured, this can be one of the most affordable types of insurance that your business will purchase overall. It is also important to know that EBL does have two separate limits; an aggregate limit and an each employee limit. The aggregate limit is the maximum amount of money that the insurer will have to pay for the damages that come from any administrative error. The each employee limit is how much the employer will have to pay for any and all damages by any employee, their family members, and any beneficiaries. Sometimes these limits apply to each claim instead of each employee.

Common Employment Practice Myths

While we are discussing everything that EBL covers for your company and why it is so important, we wanted to close with a list of myths that both employer and employee need to keep in mind as well continue to make it through this year and beyond. All of us here at Abri are here to protect your company and employees, believe in both have an equal right to what is regularly theirs. Remember this list full of myths and are not true. If you are experiencing any of these, it might be time to consider your position.

• An employee who is on salary is exempt due to their salary status.
• Every employee wants the same benefits.
• The biggest benefit that a company can and will offer is your salary.
• Any additional benefits you could offer your employees will be too expensive and they don’t want them.
• All of my employees know that our company offers amazing benefits and they know exactly what they are.
• I won’t be able to improve the performance of a plan that I already have in plan.
• The work environment is second to the amount of pay and benefits my employees are receiving.
• Employees don’t care about your company.
• Everything needs to come from HR and not from a leadership perspective.
• Creating a fear-based culture will create instant results!

Having any kind of assumption about your employees or employer is never a good situation to find yourself in. To avoid any issues and to create a proper work environment that your employees want to be a part of, make sure to spend time listing to them. Also, make sure to keep an open line of communication established so they can understand what benefits they’re entitled to and you understand what they want and need from their benefits. An EBL is necessary to keep all parties happy and to keep your company in good standing after any error. In the long run, it’s best to keep your eyes and mind open for your employees so your company can be as successful as you know it can be! Remember, we are Charleston’s premier full-service, independent insurance agency representing you, the client, not the insurance company. With every policy under the Abri Roof, we customize the perfect insurance package for you while striving to deliver the highest level of customer service! Please don’t hesitate to reach out and contact us, we are here for you! We’re Abri Insurance and we are here to make sure you have the best coverage for life in the Lowcountry!