What is employer’s liability and its purpose?

What is Employer’s Liability?

Workers’ compensation is essential in all businesses. However, in some instances within a work related injury, illness, or death to an employee it may not cover the costs or damage associated to that employee and the accident that occurred. That is why having employers’ liability insurance is a great policy to carry in addition to workers’ compensation for any business owner.

Employers’ liability insurance protects your business in the event an employee sues your company due to a work injury or illness, and they believe the business is at fault.

How is employers' liability different from workers compensation?

In essence, workers’ compensation covers medical expenses and partial wages lost; however, if the employee has reason to believe more should be given to them because the business was at fault, employers’ liability coverage will protect your business.

It is important to understand that employers’ liability is an additional policy to workers’ compensation. If an employee sues you, employers’ liability can cover expenses related to hiring a lawyer, court fees, and paying any necessary settlements.

What does employers’ liability insurance cover?

In the event an employee sues you over an injury related to a work incident, employers’ liability will help to pay your legal costs.

Although workers’ compensation policies typically allocate for an agreement between the employer and employee that the employee will not sue, that does not mean the employer is completely free of potential lawsuits.

However employers’ liability also covers other incidents that could involve your business being sued. Different types of legal actions employers’ liability covers includes:

  • Third-Party Lawsuits

If your employee was hurt by a piece of equipment on the job, the employee may also try to sue the manufacturing company of the equipment. Hence, the manufacturing company of that equipment piece could turn around and sue your business. Having employers liability protects you from being sued by another entity distantly involved within the workplace accident.

  • Loss of Consortium Lawsuits

In the event your employee was severely injured, now has a disability, or passed away due to a work related incident, a relative may choose to sue you due to lack of income from the employee who was injured and can no longer work. With employers liability insurance your business will be able to compensate.

  • Dual-Capacity Lawsuits

Another aspect you and your business can be sued is if an employee believes both the owner (you) and the business as a whole are responsible for their on-the-job injury. In essence, the employee chose to sue the employer as not only the employer, but also as the manufacturer of the product, service provider, landowner, etc. Having employers liability insurance ensures the safety and protection for both you and your business.

  • Consequential Bodily Injury Lawsuits

Being sued as an owner and business can go beyond the employee suing you. If the employee is being cared for by a relative, such as a spouse or adult child, due to a work-related injury and the caretaking role takes a serious effect on the employee’s caretaker, that caretaker can sue you and your business. If the caretaker becomes physically ill or injured, or develops serious health issues due to the caretaking of the employee, you can be sued. However, employers liability protects you at all costs.

The smart thing to do for your business is to carry an employers liability insurance policy with your workers’ compensation insurance policy.

This will help to better protect you in the event you need to protect yourself as an owner and your business in court. Without employers liability insurance, you are putting your business at serious risk in the event you are sued due to an employee’s injuries relating to work.

Why do I need employers' liability?

No matter how strict and safe your business is, there is always room for error. With error comes the chance of being sued to a point of no return. Having employer’s liability insurance protects you and your business from significant financial loss due to a work-related accident involving an employee.

Despite being amongst a pandemic, in 2020 there were reported 2.7 million non-fatal workplace injuries and illnesses. Although this was .1 million less than 2019, taking into account many individuals working from home, it can be hypothesized that many more injuries would have occurred had there been no such thing as Covid-19.

Regardless of the state of the world, work-related injuries are possible and do happen. The best way to protect your business is with a reliable employer’s liability insurance policy.

How do I get employer’s liability insurance?

At LKA Insurance Agency, we service Arizona, Utah, Oklahoma, Louisiana, and Texas. We are able to help you achieve the best possible employers liability insurance policy in existence for a price you and your business can afford.

Schedule your free consultation and free quote for employer’s liability insurance with LKA Insurance Agency today!