Question from an IIABNY member: I have attached the Company X and Company Y Employee Benefits Liability forms. Under the definitions on both forms, Workers Compensation and Disability Benefits are listed. Can you advise how the EBL forms apply to these coverages?
Answer: Both forms cover liability arising out of negligent acts, errors or omissions in the “administration” of employee benefit programs, including workers’ compensation. (Side note: The Company X form calls it “workmen’s compensation”. What century are they living in?) The definitions of “administration” are very similar, including:
- Counseling employees on the plans
- Record handling
- Enrollment and termination of participation
The Company X form also includes “interpreting” the plans in its definition. Since employees do not enroll or dis-enroll from workers’ comp coverage, the real exposure is in counseling, record handling, and interpretation. For example, if management advised an employee not to submit a workers’ comp claim for an injury, I expect the EBL form would cover any resulting legal liability should the employee’s condition worsen.
Record handling is a little more self-evident; losing paperwork, not filing forms with the Workers’ Compensation Board in a timely manner, not completing forms at all, failing to respond to insurance company requests – I think the EBL form would cover liability resulting from these. As far as the one form’s coverage for “interpreting” the plan, the only example I can think of is a manager reading the New York Workers’ Comp Law, applying it to a particular injury situation, and getting it completely wrong. The form should cover resulting liability.
All of these answers assume that no exclusions or conditions negate coverage.