What types of claims does employee benefits liability insurance typically cover?

Employee benefits liability insurance is specifically designed to cover claims that arise from errors or omissions in the administration of employee benefit plans. This insurance provides protection for employers against lawsuits stemming from the mismanagement or inappropriate handling of benefits such as health insurance, retirement plans, disability benefits, and other employee-related programs.

The focus of this coverage is on the administrative actions taken concerning benefits, rather than physical injuries or safety issues in the workplace. Claims related to physical injuries at work fall under workers' compensation insurance, while claims made by former employees regarding workplace safety are not covered because they pertain to employment practices rather than benefits management. Similarly, product liability claims are unrelated to employee benefits and instead involve claims for damages caused by defective products. Thus, the correct answer encapsulates the unique niche that employee benefits liability insurance fills within the broader spectrum of employee-related liability coverage.