What it does
CG 04 35 adds a claims-made Employee Benefits Liability coverage to the CGL. It pays damages because of an act, error or omission negligently committed in the "administration" of the insured's "employee benefit program", after any retroactive date and before the policy ends, if the claim is first made during the policy period or an extended reporting period.
Who needs it
Employers that enroll employees, give benefits advice or handle eligibility. A typical claim alleges failure to enroll an employee who then has an uninsured medical claim.
Key provisions and limits
- Each Employee limit, aggregate limit and per employee deductible in the schedule; retroactive date.
- Exclusions include dishonest, fraudulent or criminal acts; bodily injury, property damage and personal and advertising injury; failure to perform a contract; and others listed in the form.
- A claim received within 60 days after the policy ends is treated as received during the policy period if no later policy covers it.
Quoting and selling notes
- EBL is not ERISA fiduciary liability; fiduciary breaches need a separate fiduciary policy.
- Maintain the retroactive date when changing carriers.
- CG 27 15 provides the extended reporting period endorsement.
Quoting notes
- Rated per employee; limits are usually written as each employee and aggregate, with a small deductible.
- Ask whether the client uses a benefits administrator or PEO; administration errors by those parties may be covered only if the insured is legally liable for them.
- Claims commonly involve failure to enroll, failure to notify of COBRA rights or incorrect advice on benefits.
- Fiduciary liability under ERISA is excluded and needs a separate policy.
