An excellent benefits package is key to attracting and keeping the best talent. Many businesses – especially smaller ones – fear that an employee benefits package is going to put a large dent into their budget. In the short term, skimping on employee benefits might support your bottom line, but in the long run, you fail to attract the people who could take your business to the next level.
Employees these days know that they can expect to receive benefits that go beyond the base salary: medical insurance, retirement plans, disability instances, and many other perks. However, for a business, this all can seem confusing and complicated. We have put together a guide that covers the basics, explains the importance of employee benefits and employee benefits liability insurance, and provides some tips for saving money on it.
In short, employee benefits or perks are additions to the employee’s salary or wage. Employee benefits include health insurance, paid holidays, sick leave, worker's compensation, free lunches, and any other employer-provided perk either required by law or offered at the employer’s discretion.
Some people might even be willing to accept a lower salary if the benefits an employer offers are really substantial and useful.
When it comes to the law, employers throughout the US are required to provide several benefits. These include:
However, the benefits mentioned above are only the baseline. Employers are typically expected to offer many other perks, including:
The majority of employees expect to have at least a couple of weeks of paid vacation every year. Each company can set its own guidelines and conditions for when vacation can be taken, how much notice must be given before taking it out, and how the work should be delegated or completed.
One of the principal areas of confusion is between who does and does not get employee benefits. Excluding individual employees can get you into serious trouble, particularly with health or retirement insurance. These are under close government scrutiny, and you can find yourself in deep water if you make an error. As a rule of thumb, if one employee receives a benefit, all others employees should too. In more complicated situations where some are hired as contractors, part-time employees, freelancers, or under some other arrangements, seek expert advice.
Imagine you hire someone new and you or someone in the human resources department carefully completes the paperwork. Nevertheless, a mistake slips through and your new employee ends up without health insurance. However, no one knows that until the employee needs to visit the hospital and is told that they are uninsured.
The employee now has grounds to sue and demand reimbursement for their bills. It is an administrative error and the harm is financial, so the general liability policy does not cover you. General liability only applies to bodily injuries and property damage. That is why you also need employee benefits liability coverage. Even small errors could end up costing your business a lot of money.
Under employee benefits liability coverage, you will be covered for the following:
This policy can be added to your general liability coverage as an endorsement. When you purchase it, make sure it covers the specific employee benefits your business offers to the staff.
This coverage usually has two separate limits: one aggregate limit that demarcates the limit for all administrative errors, and an “each employee” limit that is the most the insurance company will pay for damage caused to anyone employee, their family members, and beneficiaries.
Exclusions of the plan include inaccurate performance predictions and poor financial advice. Neither does it cover fraud, breach of contract, insufficient funds to pay benefits, nor other claims specified by the insurance provider.
We know you want to take good care of your employees. It is possible to offer your employees great benefits while also keeping in mind your bottom line. You do not have to have a huge budget to give your employees what they need.
It is extremely worth it to show your employees that their well-being and growth matters to you. If something seems too expensive, do some research to see if there are more affordable options out there. Additionally, it is not a bad idea to occasionally survey your employees to learn which benefits matter to them most.
When it comes to employee benefits liability insurance and whether you should purchase it, an insurance agent or broker can help you with that decision.
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If you would like to learn more about employee benefits liability insurance, you can contact us by email, phone, or by filling out the free quote form on our website.