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What Is Employer’s Liability Insurance?
Employer’s liability insurance is a coverage that helps pay a business owner’s costs related to a lawsuit resulting from an employee’s work-related injury or illness. Without employer’s liability insurance, you’d have to pay for these legal costs out of pocket, which can get very expensive. Typically, this coverage is part of a workers’ compensation insurance policy. But in monopolistic states, business owners may have to get it separately.
Why Do I Need Employer’s Liability Insurance?
Small business owners need employer’s liability insurance because it helps protect them from lawsuits related to employee work-related injuries or illnesses. Without this insurance, your business would be responsible for legal costs, such as:
- Attorney fees
- Settlements
- Judgments
How Does Employer’s Liability Coverage Work?
Most states require employers to carry workers’ compensation insurance. This provides employees benefits to help them recover from work-related injuries or illnesses, helping cover their costs for:
- Medical bills
- Ongoing care
- Lost wages
However, employees can sue their employers if they feel like the workers’ compensation benefits were adequate. This is where employer’s liability insurance comes in. If an employee sues their employer, it can help cover the legal costs.
In most cases, employer’s liability coverage is part of a workers’ compensation insurance policy. But for employers in monopolistic states who get workers’ compensation coverage through a state fund, employer’s liability insurance isn’t included in their policy. Businesses in these four states must buy a separate policy:
What Does Employer’s Liability Cover?
Employer’s liability insurance helps cover four types of claims:
- Third-party lawsuits brought on by employees because of an injury or illness caused by their job.
- Loss of consortium lawsuits filed by spouses who claim a loss of marital benefits because of an employee’s injury or illness.
- Consequential bodily injury lawsuits, which a non-employee can file if they get affected by an employee’s injury or illness.
- Dual-capacity lawsuits if an employer has a second relationship to the employee.
Is Employer’s Liability Insurance the Same as Workers’ Compensation?
No, employer’s liability insurance isn’t the same as workers’ compensation. When it comes to employer’s liability vs. workers’ comp, you can think of it this way:
- Workers’ compensation insurance helps employees pay their medical bills and medical expenses
- Employer’s liability insurance helps employers with legal costs
Employer’s Liability vs. Employment Practices Liability Insurance (EPLI)
Employment practices liability insurance (EPLI) is different from employer’s liability insurance. EPLI helps protect a business owner from employment-related claims, such as:
- Despido injusto
- Discriminación
- Acoso
Employer’s liability coverage helps protect a business owner from lawsuits and claims related to an employee injury or illness due to their work.
How Do I Get Employer’s Liability Insurance?
Many business owners will find employer’s liability insurance in their workers’ compensation insurance policy. But if you got workers’ compensation coverage through a state fund, you can get employer’s liability insurance as a separate policy. You can typically get this coverage by adding an endorsement to your general liability insurance policy.
If you need employer’s liability insurance, get a quote today and see how we can help your business.
Get a Quote for Employer’s Liability Coverage
Partnering with an experienced insurance company is essential when it comes to protecting your business. We’re backed by more than 200 years of experience. Our specialists can work with small businesses to get needed business insurance coverages, like workers’ compensation and employer’s liability insurance.
Reciba una cotización today for employer’s liability insurance.