Employee Benefits Liability (EBL) policy is just one of three types of insurance that an employer requires when administering benefits programs and managing employees’ funds under the Employment Retirement Income Security Act (ERISA).

The first insurance liability is dishonesty coverage to protect a company from the theft of funds by a program administrator. Such policy is mandated by federal law.

The second insurance responsibility is fiduciary liability for the management of an employee benefit, pension policy, and policy asset management. A common vulnerability is advising a worker which stock to purchase. The fiduciary or benefit manager is charged by ERISA with acting solely in the interest of participants and beneficiaries, minimizing costs and risks of large investments, and averting any illegal transactions. Some insureds transfer their responsibility to a bank or other financial institution which may then assume the mantle of fiduciary. Since your employee benefit manager usually works together with the CEO and CFO, ERISA makes them all personally liable for their decisions.

The third insurance policy requirement is employee benefits liability, which we provide as an endorsement to the commercial general liability policy. It covers legal liability the insured incurs in administering the company employee benefits programs. Among the most important reasons to obtain this coverage is to also pay for defense costs related to a covered loss.