There are several types of insurances that all non-profit and for-profit organizations should carry. For most businesses the notion of carrying general liability coverage, property insurance and even product liability insurance seems like a no-brainer. That is because it is; there are, however, many different types of insurance that can be added to a policy. Some of these insurances are necessary while others are simply not fiscally responsible. Often times when a director is trying to decide on non-profit organization insurance the notion of employee benefits liability comes up.
Employee benefit liability is exactly what is sounds like. It is a type of insurance that covers any claims that arise from problems with employee benefits. For example. if an employee is to get a health plan and is paying forward, but the employer fails to submit the paperwork correctly the claims can and will bounce back. If this happens the employee has the right to put a claim in against the company; employee benefit liability would cover this type of claim. Failing to inform employees about their coverage is also filed under the employee benefit liability umbrella.
Now that you know what it is you are probably wondering if it should become part of your nonprofit organization insurance policy. The answer is; probably. There are certain organizations that should carry this type of coverage; mainly organizations that offer their employees benefits of any kind would be wise to add employee benefit liability coverage to their non-profit organization insurance plan.
Why is it important? Well, simply put, mistakes do happen. While no one is being malicious or intentionally forgetting to fill out paperwork, or share important information with employees on purpose it does happen. The employee benefit liability coverage offered by many insurance companies actually offers a wide range of covered issues. From COBRA issues, to misinformation being passed to employees the plan covers it. This type of non-profit organization insurance can be a lifesaver if something like this comes up.
Breaches in employee benefits can also cause some serious headaches for employees and when something goes amiss with benefits they are more likely to bring it to the attention of the organization. The organization is legally responsible to deal with employee benefits correctly and to inform employees about any and all changes to benefit packages. If this does not occur than employees have a right to place a claim against the organization.
Employee benefit insurance can be added, in many cases, to general liability insurance plans. General liability should be held by all non-profits and the addition of employee benefit liability coverage should be a minimal addition to the premiums, at most. While the insurance may never be used it is better to have it in the case of a misunderstanding or misconstrued information.