Employee Changes? Don’t Forget to Update These Key Insurance Policies
Hiring. Promotions. Departures. Role shifts. Every business experiences employee changes—but not every business remembers to update its insurance policies accordingly. That oversight can lead to unexpected claims, denied coverage, or costly gaps you didn’t see coming.
Employee changes aren’t just HR issues—they’re risk management issues, too. Whether you’re bringing on new staff, saying goodbye to a long-term team member, or shifting responsibilities internally, it’s essential to ensure your insurance coverage reflects your current workforce.
Here are three key insurance policies you should review any time your employee roster changes:
Workers’ Compensation
Why it matters: Workers’ compensation coverage is legally required in most states and is directly tied to your payroll and job classifications. As you hire new employees or change someone’s role, your risk exposure can shift—sometimes dramatically.
Example: You hire a new warehouse worker to help with fulfillment. If you don’t report the new hire and update your workers’ comp policy, your business could be underinsured in the event of a workplace injury—and that could result in serious financial penalties or claims being denied.
Other scenarios to watch for:
- Promoting an office worker to a field position
- Hiring seasonal or part-time staff
- Letting go of employees
Tip: Keep job classifications accurate and notify your insurance agent of payroll changes at least annually—or more frequently during high-growth phases.
Employment Practices Liability Insurance (EPLI)
Why it matters:
Employment Practices Liability Insurance protects your business from claims related to wrongful termination, discrimination, harassment, and other employment-related issues. As your team grows, your exposure to these risks grows too.
Example:
You promote a team member to a supervisory role without formal HR training. Later, another employee files a harassment claim. If your EPLI coverage limits or terms haven’t been updated to reflect management changes, you could face uncovered legal costs or settlements.
Other scenarios to watch for:
- Adding or eliminating roles that manage or evaluate other employees
- Onboarding remote workers in different states (different employment laws apply)
- Lacking formal policies or handbooks for new team structures
Tip: Regularly review your EPLI coverage with your agent, especially if your leadership structure or team size has changed.
Group Benefits and Health Insurance Plans
Why it matters:
Offering benefits is a great way to attract and retain talent, but benefit eligibility and participation rules can be complex. Adding new employees or losing long-term team members can affect group size thresholds, premium structures, and compliance obligations (especially under ACA rules).
Example:
You hire your 50th full-time equivalent employee. This milestone triggers new ACA compliance requirements. If your benefits plan hasn’t been reviewed or adjusted, you could face penalties for noncompliance.
Other considerations:
- Part-time vs full-time eligibility
- Waiting periods for new hires
- COBRA compliance for terminated employees
Tip: Work with your agent to align your benefits program with your current team makeup and future growth plans.
What You Can Do
It’s easy to overlook insurance updates in the hustle of managing staff—but a few proactive steps can make all the difference.
✅ Conduct quarterly or semi-annual insurance check-ins with your agent.
✅ Keep your insurance provider in the loop on hires, departures, and role changes.
✅ Review job classifications and payroll data for workers’ comp accuracy.
✅ Ensure your HR practices align with your insurance coverage—especially EPLI.
✅ Document internal changes thoroughly to protect yourself in case of future claims.
Have Questions About Employee Changes and Insurance?
Don’t wait until there’s a claim to find out you’re underinsured. If your business has experienced employee changes recently—or is planning to—contact your Hertvik Insurance agent today. We’re here to help you align your coverage with your team, your growth, and your goals