When it comes to being an employee and protecting your employees, one of the most important things to have as a business owner is employee benefits liability insurance. Today, we are going to spend some time diving a little deeper into this topic and what you need to know!
Employment and being an employer right now is incredibly tricky, especially right here in the Lowcountry. Companies across all professions are feeling the weight of being very understaffed and employees are more exhausted than ever before tiring to keep up with the extra strain that is being put on them. Fighting for security, benefits, a good salary, and insurance across the board is what is inspiring these exhausted employees to stick around. Keeping these benefits protected and insured is becoming the primary focus for many businesses across the Lowcountry, and we are here to help. It is our job at Abri insurance to figuring out how to best cover your employees while still giving you room in your budget to grow your business, together!
What To Know About EBL
Employee Benefits Liability (EBL) insurance is coverage that helps businesses with errors and omissions that happen when employee benefit plans are administered. It covers damages that the insured company becomes obligated to pay due to an error or admission made in administrating an employee's benefits. These benefits are things like life insurance, medical insurance, disability insurance, and retirement plans. A better benefits package offered to potential employees can attract the perfect employee or keep the perfect employees working for you. However, any error in properly providing and informing employees of all of their benefits, signing them up correctly, and offering everything to them that they are eligible for can lead to some very unhappy employees and potential lawsuits. While many of these errors are human errors, they're still huge errors that if not covered properly could end up with a severely injured employee without the coverage they need and a lawsuit coming your way. These lawsuits and other financial responsibilities that arise from this situation could potentially financially destroy your company, but with EBL, you will be able to help your employee and still keep your doors open.
One of the many benefits of EBL is that it covers not only the main benefits offered to an employee, but also fringe benefits like dental, profit-sharing plans employee stock plans, and much more. It is also technically sold as a stand-alone policy. However, when you are in the market to purchase an EBL, make sure the plan you choose covers the benefit plans that your specific company offers. Not all benefit packages are created the same, which we all know and recognize. Outside of the benefits we've already mentioned, employee benefit programs include accident insurance plans, pension and savings plans, social security, workers compensation, unemployment benefits, maternity leave, tuition assistant, and vacation plans. While not every company will offer all of these benefits and while not every employee will want or use each of the benefits offered to them, they will be important to your employees and many will need this coverage to survive, remain healthy, and live to the fullest. These benefits are important to your employees, so these benefits need to be important enough to you to get the proper coverage to protect what is rightfully owed to your employee and to protect your company along the way. Make sure when buying insurance from Abri or your insurance company of choice, that you take the time to sit down and explain all the benefits you need to be protected and covered through with EBL.
Please note that almost all EBL endorsements give coverage on a claims-made basis, which means these endorsements cover claims made during the policy period that was given to your employees. If claims are made outside the policy period then they won't be covered. While you're thinking that this might add even more of an expense to the insurance policies you already have, it can save you money and help your company in the end. If your company offers any kind of benefits to your employees, if you have a high employee turnover rate, if someone (an employee) beside you handles the benefits offered to all of your employees or you offer different benefits to each employee, then it is very important to EBL insurance. It is also important to know, as a business owner, that this type of policy only covers legally required and optional employee benefits. In this case, health insurance is not always legally required for companies to offer their employees. The Affordable Care Act specifies that employers with over 50 full-time employees provide health insurance.
Health insurance often gets targeted for benefit claims. While this type of policy will cover some of these costs, it's important to remember it won't cover all of them. These policies also insure against claims made by both current and former employees. These plans will have certain deductibles and will cover a specific amount incurred by current and former employees. When doing your research on how much these policies could cost you, the cost will vary based on multiple things, but mainly on how many employees you are planning to cover with this policy will determine the final price. Rest assured, this can be one of the most affordable types of insurance that your business will purchase overall. It is also important to know that EBL does have two separate limits; an aggregate limit and an each employee limit. The aggregate limit is the maximum amount of money that the insurer will have to pay for the damages that come from any administrative error. The each employee limit is how much the employer will have to pay for any and all damages by any employee, their family members, and any beneficiaries. Sometimes these limits apply to each claim instead of each employee.
Common Employment Practice Myths
While we are discussing everything that EBL covers for your company and why it is so important, we wanted to close with a list of myths that both employer and employee need to keep in mind as well continue to make it through this year and beyond. All of us here at Abri are here to protect your company and employees, believe in both have an equal right to what is regularly theirs. Remember this list full of myths and are not true. If you are experiencing any of these, it might be time to consider your position.
Having any kind of assumption about your employees or employer is never a good situation to find yourself in. To avoid any issues and to create a proper work environment that your employees want to be a part of, make sure to spend time listing to them. Also, make sure to keep an open line of communication established so they can understand what benefits they're entitled to and you understand what they want and need from their benefits. An EBL is necessary to keep all parties happy and to keep your company in good standing after any error. In the long run, it's best to keep your eyes and mind open for your employees so your company can be as successful as you know it can be! Remember, we are Charleston's premier full-service, independent insurance agency representing you, the client, not the insurance company. With every policy under the Abri Roof, we customize the perfect insurance package for you while striving to deliver the highest level of customer service! Please don't hesitate to reach out and contact us, we are here for you! We're Abri Insurance and we are here to make sure you have the best coverage for life in the Lowcountry!
Knowing the truth about your insurance policies and coverage is just as important as knowing the false information floating around out there. Today, we are going to be talking about and debunking some of the most common small business insurance myths out there!
If the last year has taught us anything, it's that we need to be prepared for anything and everything that could come our way. This idea has been applied to every aspect of our personal and professional lives. We have been right here along with each of you figuring out the best way to go about handling everything. Our daily focus is on how to best support our clients and figuring out how Abri Insurance can continue to offer the best care and support possible for you, your loved ones, and your possessions no matter what might come your way.
Small businesses felt and continue to feel some of the most painful and difficult effects of the pandemic, and many are struggling to recover still. The waters are still unsure, and who knows what's to come. One of the best ways to keep up the fight and to keep going is to make sure you have the correct insurance policies and the correct coverage for your small business. While the world continues to make its moves back to a sense of normalcy in its own and unique way, it's also important to know and squash any incorrect information and myths that are floating around out there about your small business and small business insurance. This way you can continue to recover, know what to avoid and ignore as you get back to work, and focus on the task at hand to get you back to operating as normal!
What Is Small Business Insurance?
Let's start with the basics! What is small business insurance and what do you need to know about it? One of the most important things to remember in this situation is that small business insurance is there to protect and cover what you've built over the years. You've worked so hard to create your small business, you deserve and need someone to work just as hard as you to watch over everything you've built and created. Small business insurance, or commercial insurance, is dedicated to protecting a business's income, property, and it's assets. The most common policy for a small business is called a business owners policy, or a BOP. A BOP will include three types of coverage to help protect your business; interruption coverage, liability coverage, and business property coverage. Depending on what type of small business you own, you may also be able to buy additional insurance coverage that is customized for your needs.
What Does Small Business Insurance Cover?
We know this question is at the tip of your tongue, and it should be! It is very important to know what is included in your BOP. Most basic policies will cover things like financial loss, damages from things like theft, fire, wind, falling objects, and lightning. A BOP might also help you replace business property if it is damaged due to man-made and natural disasters such as machinery, office furniture, and computers. It will also help, if you own your office building, to pay for any damages done to it by fire or other natural disasters. General liability within a BOP will help pay for the medical expenses that might accrue if a customer or a visitor is injured at your office and can also help cover legal fees as well. Finally, a BOP will also help with business interruption coverage. If your business is interrupted due to some kind of peril, this will help cover the cost of rent, lost business income, and repairs being made to your building.
Examples of Small Business Myths
Now that you know more about what small business insurance is, what a BOP is and what it will offer, it's time to dig a little deeper and debunk some very tricky myths floating around out there about small business insurance!
Fiction: My employees drive their own cars. This means that I don't need to buy business auto insurance.
Fact: It is very important to understand that while you and your employees might have auto insurance, you can't assume that it will cover any incident that happens when an employee is using their personal vehicle for business purposes. To be safe and to avoid any uncovered losses, to protect your employees, your company, and yourself, it is best to talk with us at Abri Insurance or with your insurance agent about getting the sufficient insurance you need for commercial auto coverage! Please note, this can come with perks! You can get coverage for rental vehicles, GPS equipment, and lease/loan gap coverage.
Fiction: My business is too small for a cybersecurity breach!
Fact: We will need to talk about this in another blog in the future, but please note that any cybercriminal will not discriminate when it comes to hacking into a company's private information to get what they want. If they want to go after a small company or a large company, a cybercriminal will do what they wish. You are always at risk and you will need to be covered for this risk. The House of Representatives Committee on Small Business reports that 40% of all cyber-attacks are focus on companies with 500 employees or less. Your plan should include privacy breach and cyber liability coverage. This can be included in your overall liability coverage.
Fiction: My umbrella policy has it all covered!
Fact: Just because your small business has an umbrella insurance policy doesn't mean that you're covered for anything and everything! Please speak with your insurance providers or with us at Abri Insurance to learn more about what exactly your umbrella policy covers and what it does not cover.
Fiction: You don't need insurance to cover your small business located in your home!
Fact: For anyone who is a small business owner that went through the first year of the pandemic knows that this is very false! Remember, even if you have an excellent homeowners insurance policy, this doesn't mean your home office, business, or your business equipment will be covered. Your home and the structure of your home will be covered under your homeowner's insurance policy, but nothing pertaining to your business will be. This will require additional coverage!
Fiction: If I don't have any employees, I don't need workers comp insurance!
Fact: Remember, even if you are a one-person operation, you still have an employee; you! While some states, like Texas, don't require you to have workers comp, you are still putting yourself and your company at risk if you don't have workers comp, even as a business of one. You could personally be held accountable and responsible for damaged products, cause of injury to your clients due to your faulty products, if shipments aren't fulfilled, and more.
Fiction: Contracts will always protect you from legal action.
Fact: No matter how legally sound or binding a contract might be, if you don't uphold your contractual obligations to a client or an employee, legal action could still be taken against you! This is where professional liability insurance can help you cover your losses and mitigate risk when a client is upset by your products and services.
Fiction: When you get small business insurance, comprehensive insurance is yours by default!
Fact: You will get general liability insurance when you get a small business insurance plan. Please note that this is just general coverage. It will cover most of your business needs but not certain things that might be important or pertain to your business.
Fiction: You can lower your insurance premium by reporting a lower payroll or lower revenue.
Fact: Please don't report false information to your insurance company to pay less for your coverage. This is what is called insurance fraud. This can cause some serious damage to your company, reputation, and you could end up with a huge bill to pay back what you were trying to save.
Fiction: Business insurance is too expensive.
Fact: Why is this always a fact that has to be challenged? While yes, you will be paying for a product and service that you might not use very often, when you do need it, it will end up saving you so much money and protect you, your business, and your employees. Your business is worth protecting, isn't it? A good rule of thumb to remember is that the smaller your business, the more insurance you should consider. If it is just you that is in charge of your business, you will be at fault and responsible if anything goes wrong!
Fiction: Malpractice insurance is only something that doctors need to worry about!
Fact: Medical malpractice is only one form of Error and Omissions coverage. Another form is known as professional liability insurance. E&O insurance will help cover you if you find yourself in a situation where you end up having legal fees to pay due to being sued for negligence or harmful advice. No matter the mistake, lawsuits will still always be possible and you will need protection.
Small business owners, this was a blog dedicated just to you! We urge you to take this information to heart and to invest in an excellent small business insurance plan. We also recommend that you know everything about your policy inside and out. If you are a small business owner in need of the best coverage available or if you want to understand your existing policy a little better, please reach out to us at Abri Insurance. We are more than happy to speak with you about this topic! We're Abri Insurance and we are here to make sure you have the best coverage for life in the Lowcountry!
We are Abri
We've created this blog to keep our customers and others in the know. When it comes to insurance and keeping people safe, no knowledge should be off limits.