Employers liability insurance protects employers from the possibly significant financial losses that occur when an employee sues over a job-related illness or accident not covered by workers’ compensation.
If you have at least one employee, employers’ liability insurance is a safeguard for your business. Which matters are covered by employers liability insurance ultimately depends on the policy you choose.
Common Employers Liability Insurance Coverage
Policies differ based on the providing insurance company, but most employers liability policies provide the same basic coverage terms. Traditional workers’ compensation generally covers lost wages, medical expenses, rehabilitation costs, funeral expenses and death benefits.
Employers liability insurance will usually cover other damages outside of workers’ compensation if an employee is injured or becomes ill while on the job.
Employees Who Have Opted Out Of Workers Compensation
Most states in the U.S. require employers who have at least one employee to acquire workers’ compensation; however, some states allow employees the option to opt out. When an employee chooses to opt out of coverage, they gain the right to sue the employer for damages if they become ill or injured on the job.
Select Industries Not Covered By Workers Compensation
Some industries are not covered by workers’ compensation at all, meaning if they become ill or injured on the job, they are not eligible for these benefits. When this happens, these employees may choose to sue.
Industries that are not usually covered by workers’ compensation include agricultural workers, seasonal workers, railroad workers, domestic workers, and longshoremen.
Employees Who Have Become Ill Which Did Not Stem From Employment
It is important to understand how workers’ compensation works. It does not cover illness or injuries that occur outside of the workplace; instead, it is designed to cover occupational diseases or injuries that occur during the course of employment.
For example, the flu is considered a common “disease of life” and although you may have caught it from someone at work, it is not covered by workers’ compensation. Work-related illnesses may occur due to exposure to asbestos, chemical fumes or other workplace irritants.
What Does Employers Liability Insurance Not Cover?
It is also important to be aware of certain injuries and illnesses that employers liability insurance does not cover. Some of these include the following:
Injuries that are intentional are typically not covered under employee’s liability insurance. For example, when dangerous chemicals are not stored properly, resulting in a spill that injures another worker, or if a machine defect is known but overlooked, causing an employee’s limb to get caught or compressed.
Intentional injuries can also occur when employees are not given proper safety equipment or instruction for using materials or equipment safely.
Liabilities Not Assumed Under Contract
In some scenarios, certain liabilities may not be assumed under a contract. If an employer assumes liability for a bodily injury to an employee under a contract, the employers liability exclusion does not apply unless the contract qualifies as an insured contract.
Illegally Employed Employees
If you have employees who were illegally hired, your employers liability insurance will not provide coverage if these employees become ill or injured and decide to sue your business.
Some of the most common injuries and accidents that occur in the workplace include muscle strains, cuts and lacerations, repetitive strain injuries, exposure to loud noise, collisions and crashes, being hit by falling objects and slips, trips and falls.
Injuries Covered Under Certain Federal Law
Some types of injuries to employees are covered under federal law and therefore are not eligible for employers liability insurance coverage. The Defense Base Act (DBA) covers medical benefits and disability to employees injured while working on U.S. military bases or with any U.S. government agency.
The Federal Coal Mine Health and Safety Act covers injuries or illnesses caused by unsafe or unhealthy conditions, such as a coal outburst. The Longshore and Harbor Workers’ Compensation Act covers employees who become disabled during the course of their job duties on the navigable waters of the U.S.
Contractors Or Employees Outside Of The U.S. Or Canada
If you have employees that work outside of the United States or Canada, these employees would not be covered under your employers liability insurance policy. For instance, if an employee traveled outside of the United States or Canada to accept a job and that employee was injured in the line of work, the policy would not cover any damages.
Speak To A Professional Business Insurance Agency
On-the-job illnesses and injuries can occur at any time; it is important to be prepared. Workers’ compensation insurance may cover a majority, but not all, of the claims relating to employee injuries. Employers liability insurance coverage serves as an additional safeguard in the event that you are sued by an employee.
For more information about what employers liability insurance covers or to obtain a policy for your business, reach out to the business insurance professionals at Pro Insurance Group by calling 833.619.0770 or request a quote online.