Employers Liability Insurance is an essential aspect of business insurance that helps protect employers against legal liabilities stemming from work-related injuries or diseases that employees might suffer. While closely associated with Workers’ Compensation, Employers Liability compensates where the latter does not fully cover the employer’s legal liability.
Key Points
- Purpose and Coverage Employers Liability Insurance covers the financial implications arising from a workplace accident claimed due to negligence or an unsafe working environment, not covered under Workers’ Compensation.
- Legal Requirement In many places, purchasing Employers Liability Insurance is a statutory requirement if you have employees. It typically offers additional coverage over basic Workers’ Compensation policies, including potential legal fees and damages workers might seek beyond the statutory limits.
Why it’s Essential
- Financial Protection: Helps shield businesses from significant potential legal fees and settlements that may happen if an employee sues for damages over and above what workers’ compensation covers.
- Compliance with the Law: In jurisdictions that require it, maintaining adequate Employers Liability coverage is essential for legal compliance.
Difference from Workers’ Compensation
Workers’ Compensation provides compensation to employees for workplace injuries or illnesses, on a no-fault basis, essentially covering medical care, lost wages and rehabilitation. Employers Liability kicks in when an employee holds their employer responsible for the injury beyond observations set by Workers’ Compensation schemes.
Further reading and References
- ‘Picard, T.: Guide to Employers Liability. Clear Insurance Management Limited. 2019.
- Workers’ Compensation Acts such as the ‘United States Department of Labor describes essential regulations and requirements pertinent in chaining legal landscapes: Workers’ Comp Insurance
Utilizing Employers Liability Effectively
Ensuring that your business is adequately covered by Employers Liability Insurance is not only a legal mandate but a crucial risk management strategy to mitigate the financial consequences of potential lawsuits.
