Even though you may offer your workforce a robust employee benefits plan, there is always a chance something will go wrong during the administration of those benefits. An employee may seek compensation if they believe the company denied them coverage.
You may already know that employee benefits liability coverage protects your business financially if someone takes legal action against you, but do you know what else it can do? Here’s what you need to know about employee benefits liability coverage.
Employee Benefits Liability Helps Your Business Stay Compliant
Employee benefit plans must comply with state and federal regulations like the Employee Retirement Income Security Act. If your plan does not comply, your company could face penalties and legal action. An employee benefits liability plan will help mitigate the risk associated with non-compliance.
Protects Your Business from Human Error
Benefit plans can endure some complications, and human error is always possible. When a mistake occurs and an employee files a claim, your employee benefits insurance policy kicks in. And while you know your coverage will protect your organization financially, you also have the opportunity to share with those that made the mistake that your foresight will protect them and their jobs, too.
Helps Pay the Legal Bills
Court cases can be costly. Without protection, legal fees could run you out of business. Suppose an employee sues and the case goes to court. In that case, your liability coverage will help you fund your legal defense, pay for any agreed-upon settlements or court judgments, and cover other bills connected to the lawsuit.
Employee Benefits Liability Safeguards Your Employees
While the policy supports you if an employee files a claim, it also safeguards your workforce if something benefits-related error occurs. Employee benefits liability coverage is also an example of your commitment to your employees and their right to seek compensation for damages when an administrative or other mistake occurs.
Attracts New Employees
Employee benefits liability insurance can also act as a recruitment tool. Job seekers who want to ensure they accept a position with an organization that cares about their well-being might ask questions about how you treat employees. Sharing coverage details with recruits is crucial to demonstrating your commitment to those who work for you.
Sharing your coverage with current employees is essential, too. Knowing your organization has employee benefits covered might help you retain their services if they seek a position with another company.
Provides Peace of Mind
In many ways, employee benefits liability insurance acts as a financial safety net for both employers and employees. As an employer, you’re assured that your business can address any concerns from your workforce and any legal claims sought by employees. Your employees can rest easy, knowing you also have their best interests in mind, demonstrating that you believe in their right to seek compensation if they have a legitimate claim.
Remember, employee benefits liability coverage is fundamental to running a successful business in almost every industry. It shows your commitment to both the business and the people who make it run.
About Securance
From our home base in Texas, Securance serves the insurance needs of clients throughout the country and abroad. With 50-plus years as a trusted advisor to businesses, families, and individuals, we help clients safeguard their hard work and step confidently into the future knowing they are well protected.
Contact us today at (713) 977-6606.
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