Employee benefit liability insurance is coverage an employer can purchase to protect claims made by employees over administrative errors regarding their group insurance coverage, pension plans, stock options, and other benefits.
This coverage is usually added as an endorsement to an existing liability insurance policy.
Employers can be held liable for errors in the administration of their employee benefit programs, even for honest mistakes. For instance, if the insurance benefit coordinator mistakenly tells an employee that they have coverage for vision care, the employee can file a case against the employer.
If the employer's liability insurance includes employee benefit liability coverage, the policy can pay for the mistake.
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