Employee benefits liability (EBL) is a crucial aspect of managing staffing firms. This type of liability insurance protects against errors like enrollment mistakes or incorrect plan administration, which can be costly for both staffing firms and their clients.
This article is specifically designed for insurance agents working with staffing agencies to help them navigate the unique risks of employee benefits liability insurance.
Employee Benefits Liability Vs. EPLI
Many people confuse employee benefits liability insurance (EBLI) with employment practices liability insurance (EPLI), but both actually serve different purposes.
EBL covers mistakes involving employee benefit plans, such as errors in enrollment or miscommunication of benefits. In contrast, EPLI protects against employment-related claims like wrongful termination, harassment, or discrimination.
For instance, if a staffing agency incorrectly enrolls an employee in a health plan, resulting in gaps in coverage, EBL will help cover related costs. On the other hand, EPLI will provide coverage if an employee files a harassment claim.
Understanding the difference between these policies ensures staffing agencies have comprehensive coverage for all potential liabilities.
Types of Benefit Plans Covered by EBL Insurance
Employee benefits liability insurance typically covers different types of benefit plans.
- Health insurance: Provides medical coverage for employees, ensuring they receive necessary healthcare. Mistakes in enrollment or communication can lead to uncovered medical expenses, potentially resulting in legal claims.
- Retirement plans: Covers errors related to employee retirement benefits, such as incorrect contributions or misinformation. Mistakes here can significantly impact an employee’s future financial security.
- Disability insurance: Offers financial support in case of disability. Errors in enrollment or benefit calculations can lead to a lack of coverage when employees need it most.
- Wellness programs: Includes benefits related to employee wellness, such as fitness incentives or mental health services. Incorrect administration can lead to employees missing out on expected benefits, which could trigger legal action.
Each plan plays an essential role in attracting and retaining talent. Nine out of 10 workers say they consider retirement and benefits packages when deciding whether to join a company.
However, mistakes in administering these plans can lead to significant liability. Imagine a scenario where incorrect information about a retirement plan leads to an employee losing out on expected benefits. Such an oversight could lead to a lawsuit. Thus, comprehensive EBL coverage is critical to protect staffing firms against these kinds of risks.
Guiding Clients in Choosing EBL Insurance
As an insurance agent, evaluating your staffing clients’ benefits programs is key to identifying coverage gaps. Each staffing firm’s needs may differ based on the specific benefits they offer and the industries they serve, so a one-size-fits-all approach won’t work.
Practical advice includes thoroughly assessing the types of benefit plans they provide and understanding any complexities related to those offerings. By tailoring EBL insurance policies to meet these unique risks, you can help staffing agencies maintain a strong safety net, ensuring that both employers and employees are protected against errors and omissions.
Get in touch with us today to learn more about how you can provide the right employee benefits liability insurance solutions for your staffing clients.
About World Wide Specialty Programs
For the last 50 years, World Wide Specialty Programs has dedicated itself to providing the optimal products and solutions for the staffing industry. As the only insurance firm to be an ASA commercial liability partner, we are committed to that partnership and are committed to using our knowledge of the industry to provide staffing firms with the best possible coverage. For more information about Staffing Professional Liability Insurance or any other coverage we have available to protect your staffing business, give us a call at (877) 256-0468 to speak with one of our representatives.