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What is Employers Liability Insurance?

July 11, 2022
Mordechai Kamenetsky

A part of workers' compensation insurance is employers' liability insurance. Most policies for workers' compensation include employer liability insurance or EL. The simple answer is that this insurance protects your company if an employee sues because of an illness or injury at work.

Understanding Workers' Compensation

It can be difficult to understand what and why you need workers' compensation. At Kickstand Insurance, we efficiently provide supportive services so you quickly get the information you need. This lets you get back to more pertinent tasks. Our online quote will help you with an instant estimate backed by underwriters within 48 hours.

When breaking down workers' compensation, we can help you understand all the details, starting with the understanding that workers' comp has two sides. The first side is the side you normally hear about, the workers' compensation half of the things.

Workers' compensation exists to pay for medical expenses and/or a portion of lost wages when an employee is injured on the job. It also assists if an illness they are diagnosed with is linked to their position and interrupts their ability to perform their tasks.

The second half, employers' liability insurance, provides protection if the company is blamed for the illness or injury. It's essentially an extra layer of protection when the employee feels the company is liable for negligence resulting in their illness or injury.

Injuries and accidents happen. Workers' compensation is a no-fault system that pays for accidents and claims. For instance, workers' comp kicks in if any of the following apply to the situation.

  • Loss of income for employees unable to perform their job duties
  • Medical expenses for employees injured on the job
  • Retraining expenses if employees are unable to return
  • Permanent injury or disability for lasting injuries
  • Survivor benefits if a death occurs on the job

When injuries and accidents happen, employers' liability will activate if the employee states they were injured due to the company not handling safety issues correctly. EL has limits. When considering coverages for both workers' compensation and employers' liability, you want to ensure you are working with an experienced team to walk you through each step.

Why do I need Employers Liability Insurance?

You might be wondering why you would need EL if workers' compensation covers all of the above. Sometimes, an employee will want more services or pay than what workers' comp provides. As part of your workers' compensation package, employers’ liability insurance is given to handle the legal parts of the claim.

Employers' liability insurance protects the business from legal problems in a way that workers' compensation does not. Employers' liability covers the cost of lawsuits filed by workers who get sick or hurt on the job.

Employers' liability insurance is similar to general liability insurance. General liability insurance protects a business from claims from third parties, like when a customer gets hurt or is careless. Still, it doesn't cover mistakes made by employees. Employers' liability fills in the gap by letting workers who get hurt on the job file legal claims. It can be used for many things, such as:

  • Legal defense costs
  • Awards of judgments and damages
  • An offer to settle
  • Costs related to the court

More in-depth information may be needed to understand what type of claims EL will cover. Employees who receive workers' compensation benefits usually agree not to sue their employers. But that doesn't mean you're immune to lawsuits.

Third-party-over action lawsuits

If an employee sues a third party over an injury at work, the employer could be sued by the third party. And then that third party can sue the employer. For instance, a worker hurt by a piece of equipment at work could sue the company that made the equipment. Then the company that made the product could sue the employer.

Loss of consortium lawsuits

Loss of consortium is a type of lawsuit that an employee's family could file if their loved one was hurt badly at work, got a disease that makes them weak, or died at work.

A loss of consortium lawsuit asks for extra money due to injury or death.

Dual-capacity lawsuits

Suppose you have a second relationship with an employee. In that case, that employee could sue you over a work-related illness or injury. This is called a "dual-capacity" suit. For instance, a company might make a product that hurts one of its employees. The worker could sue the company both as an employer and as a maker.

It's important to know that some policies do provide exclusions. This includes things like physical or mental harm that was done on purpose. Check with your policy to find out more about exclusion and other limits.

Navigating Employers Liability Insurance

As you can see, there are many ins and outs when it comes to this branch of workers' compensation. When committing to worker compensation insurance, you want to make sure you are working with a reputable team that can answer your questions and navigates the maze of confusion.

You also don't have time to wait for quotes or mess with complicated forms. At Kickstand Insurance, you get the answers you need quickly and continued support for as long as you need it. We can discuss each policy, limit, and coverage in a way that makes sense.

We ensure you understand your policy and that all questions are answered promptly. We want you to be comfortable knowing that you, your business, and your staff are in capable hands. It's our duty to ensure your business, and your employees receive proper coverage, that your job roles are documented correctly, and that your business is under the right category.

If you have questions filling out our quick online form for coverage, we're available to talk with you, or you can click on the link and send us a message. Once your quote is generated, our system will provide an estimated quote for you.

We look forward to working with you and providing you with the coverage you need.

Mordechai Kamenetsky

Mordechai Kamenetsky, co-founder and lead agent of Kickstand, is recognized as an expert in workers' compensation. He is passionate about helping small businesses manage risks and lower their workers' comp costs. In his articles, he educates readers and clients on the intricacies of workers' comp insurance.

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