Do you want to be an Insurance Company?
Probably not.
The fact is though, quite a number of Small Business Owners are in the precarious position of becoming an Insurance Company simply because they aren’t adhering to a few simple guidelines…and they don’t have the “back-up” plan in place.
Let’s take a look at how you could become an Insurance Company and end up paying 10’s of thousands of dollars in Life Insurance and/or Disability claims:
- You forget to enroll your new employee and… they die without the Insurance Company knowing they even exist…their Spouse hires a Lawyer and kaBOOM! You are an Insurance Company!
- You allow an employee to waive all benefits and… they die without the Insurance Company knowing the even exist…their Spouse hires a Lawyer and kaBOOM! You are an Insurance Company!
- Your employee doesn’t apply for amounts of Disability Insurance that they are eligible for because you didn’t explain to them that they can apply for more insurance…and they go off on Disability…your employee hires a Lawyer and kaBOOM! You are an Insurance Company.
These are just a few examples but you get the idea that it is very easy to have a slip-up that potentially costs you way more than what your annual Benefits premium is.
What’s your back-up plan?
Well, your back-up plan shouldn’t be your company’s Line of Credit. Your back-up plan should be something more practical and…FREE!
Your back-up plan should be “Plan Administrator Liability Coverage” (PALC). PALC is available as a FREE rider to your General Business Insurance coverage. Connect with your Commercial Insurance Broker and ask them if you have it. Don’t have it? Get it. Don’t have a Commercial Insurance Broker? Call me. I’ll get you one.
Simple. Don’t administer a Benefits Plan without Plan Administrator Liability Coverage.
The above information is for general reference only. It is not intended to be legal or tax advice. You may or may not be affected by any or all of these guidelines. Please check with your Carrier, Lawyer, Accountant, or Human Resources Professional for further information.
Having said that, the above information is only the tip of the iceberg as to areas that can be affected in managing an Employee Benefits Program. To learn more, contact your Broker and if they don’t have the answers you are looking for, then call me…226-218-6867. I’ll look at after you.
Located in Cambridge, ON Sharkey Group Insurance provides independent Group Insurance/Employee Benefits advice & counsel for Small Businesses across Ontario.