COMMERCIAL GENERAL LIABILITY COVERAGE

This provides liability coverage for clerical errors related to administering your employee benefits program.

When you run a business, there are three types of insurance coverage you need if you are an employer administering benefits programs and handling employees’ funds under the Employment Retirement Income Security Act (ERISA).

Employee Benefits Liability Coverage is an endorsement to your Commercial General Liability Policy. It covers legal liability the insured incurs in administering the company employee benefits programs. One of the primary reasons to add this coverage is to pay for defense costs associated with a covered loss.

The other two insurance endorsements your business needs are Dishonesty Coverage to protect your business from the theft of funds by a program administrator (this coverage is mandated by federal law), and Fiduciary Liability Coverage for the management of an employee benefit, pension plan and plan asset management.

Covered employee health benefits programs are:

• Group life, health, dental, or disability insurance
• Profit-sharing plans
• IRAs
• Savings plans
• Pension plans
• Stock subscription plans
• Unemployment insurance, Social Security benefits, or workers' compensation and disability benefits
• Auto, homeowner’s and legal advice insurance
• Travel and vacation plans
• Educational tuition reimbursement plans
  

Typical claims under this coverage would be:

• Advising an employee on which stock to buy. Because your staff benefit manager usually works with the CEO and CFO, ERISA makes them all personally liable for the decision.
• Failure to sign up a new employee for requested medical insurance.
• An error terminating a benefit for an active employee.
• Forgetting to offer optional benefits.
• Forgetting to offer dependents’ coverage.
• Forgetting to offer a spouse’s option for a retirement plan.
  

Please note that there are a couple of highlighted exclusions:

• Bodily injury, property damage, personal injury or advertising injury
• Any act you or your staff carry out which is an ERISA fiduciary responsibility

Contact an agent about this coverage