Employee benefits liability (EBL) insurance is insurance that covers an employer’s legal liability for administrative errors or omissions in managing employee benefit plans. It typically covers mistakes such as failing to enroll an eligible employee, providing incorrect information about benefits, or making administrative errors in plan records. For example, if an employee loses health insurance coverage because the employer failed to process their enrolment correctly, EBL insurance may cover the employer’s resulting legal liability. It does not pay the cost of providing employee benefits. It also does not cover claims alleging breaches of fiduciary duty, which are typically covered by fiduciary liability insurance.
See also: Fiduciary Liability Insurance.