Do You Have Employee Benefits Liability Coverage?

Ryan Hanley has provided a tale of caution regarding employee benefits liability:

Let’s say you just hired a new employee and it’s their first day.  First you walk them around the office introducing them to each employee and point out the “strategic” bathrooms.  Then you sit them down and talk about how happy you are they’re joining the team and what your expectations are for their first few months of work.  After the pep-talk your “Boss” obligations are over so you take the new employee to see the HR Manager who’s job it is to go through the nuts and bolts of working for your company.

What you don’t realize walking away from the HR Manager’s office is that he had been up till 300am the night before with a sick child and wanted nothing more than to zip through the New Hire presentation and get back to vegetating in front of his computer screen for the remainder of the day.  So the HR Manager begins to skip through sections telling himself that he’ll explain Benefits to the new employee tomorrow.  All that was necessary to explain was the building key-card and computer passwords.  The HR Manager is a good employee, but today he just wanted the new employee out of his office.  As fate would have it the next day was very busy with payroll issues and the HR Manager forgot to go talk to the new employee.  And the new employee was so excited about her new job that she completely forgot that she did not sign up for the Benefit program.

Two months later the new employee is involved in a very severe car accident on the way to work.  What do you think her reaction was when she woke up to hear she did not have Health Coverage?!

Can you say LAWSUIT!

As Ryan later notes, most companies have some employee benefits coverage within their general liability policies. But fewer know exactly what they would do if the situation described above came true.

The lesson, as always, is to understand your coverage.