Masonry Magazine May 1967 Page. 7
EMPLOYEE BENEFIT
LIABILITY
Starting with an important Missouri court case and eventual verdict, for $78,000 in damages, it became clear that an employer can be held legally responsible for incomplete or questionable advice given to an employee regarding its pension plan. This opened up a whole new area of potential loss.
Insurance coverage is now available to protect an employer from such claims arising from administration of Group Life Insurance, Group Health Insurance, Profit Sharing Plans, Pension Plans, Employee Stock Subscription Plans, Workmen's Compensation, Unemployment Insurance, Social Security, Disability Benefits Insurance, and similar employee benefit programs. With the number and complexity of benefit programs on the increase, the task of proper administration, including the imparting of mistake-proof advice to an employee about the options he has when retiring or leaving for other reasons, has become more difficult. Insurance to protect against claims arising from these responsibilities has proven to be correspondingly popular, particularly with those employers who have to keep track of such things for several hundred or more employees.
The coverage is normally provided by endorsement of the primary Comprehensive General Liability policy form, subject to a deductible of approximately $1,000 per claim. The premium cost is based upon the number and complexity of benefits programs to be insured.
One alternative is to arrange for protection via endorsement to the Umbrella Excess Liability policy form, the amount of deductible applicable to Employee Benefit Liability and premium charge being subject to individual negotiation.
Coverage endorsements will vary but, in general, administration can include:
(a) giving counsel to employees with respect to Employee Benefit Programs
(b) interpreting Employee Benefit Programs
(c) handling of records in connection with Employee Benefit Programs
(d) effecting enrollment of employees under Employee Benefit Programs
It normally excludes:
(1) any dishonest, fraudulent, criminal or malicious act;
(2) any loss resulting from injury to or destruction of tangible property; or
(3) any claim or suit based upon:
(a) failure of stock to perform as represented by an insured, or
(b) advice given by an insured to an employee of the named insured to participate or not to participate in any stock subscription plan
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