It’s all fun and games until your HR Manager forgets to explain the employee benefit program…
According to IRMI.com, New York employee benefits liability (EBL) is defined as:
“Liability of an employer for an error or omission in the administration of an employee benefit program, such as failure to advise employees of benefit programs.”
What Is New York Employee Benefits Liability?
Donald Malecki wrote a fantastic article on NY employee benefits liability insurance for Rough Notes in which he listed the types of programs that could be considered “at risk” with employee benefits liability insurance:
- Group life insurance and health
- Profit-sharing and pension plans
- Employee stock subscription plans
- NY workers compensation
- Unemployment insurance
- Social security
- Disability benefits
Does your organization carry any of these programs? Sure it does.
Does your organization carry all of these programs?
There’s a very good chance it does. Does your organization have New York employee benefits liability?
You have no idea!
Why Do I Need Employee Benefits Liability?
Let’s say you just hired a new employee and it’s her first day. First, you walk her around the office introducing her to each employee and point out the “strategic” bathrooms.
Then you sit her down and talk about how happy you are that she’s joining the team and what your expectations are for her first few months of work. After the pep-talk, your “boss” obligations are over so you take the new employee to see the HR Manager whose job it is to go through the nuts and bolts of working for your company.
What you don’t realize walking away from the HR manager’s office is that he had been up until 3:00 AM the night before with a sick child and wanted nothing more than to zip through the New Hire presentation and get back to vegetating in front of his computer screen for the remainder of the day.
So the HR Manager begins to skip through sections telling himself that he’ll explain employee benefits to the new employee tomorrow. All that was necessary to explain was the building key-card and computer passwords.
The HR Manager is a good employee, but today he just wanted the new employee out of his office. As fate would have it, the next day was very busy with payroll issues and the HR manager forgot to go talk to the new employee.
The new employee was so excited about her new job that she completely forgot that she did not sign up for the employee benefits program.
Two months later the new employee is involved in a very severe car accident on the way to work. What do you think her reaction was when she woke up to hear she did not have NY health insurance coverage?!
Can you say LAWSUIT?!
The Rub
The good news is that you may already have NY employee benefits liability if you have NY commercial general liability or a business owners policy (BOP) for your business. It’s not guaranteed that you do so don’t assume it.
In the example above, your New York employee benefits liability insurance coverage would have kicked in to pay the lawsuit if you had employee benefits liability coverage. The bad news is that you didn’t know that till the end of the post. If you have an employee, or if you have ever thought of having an employee, call your insurance professional and find out if your business is covered with NY employee benefits liability.
If you would like a review of your business insurance program, including employee benefit liability, please call us at (518) 456-6688 or click here to email us.
Image courtesy of ambro / FreeDigitalPhotos.net