What is employers liability insurance?
Employers liability insurance protects you and your business if an employee gets injured or sick on the job and decides to sue. More specifically, it covers lawsuits and claims related to negligence or unsafe conditions.
In most cases, employers liability is included on a workers' comp policy. But if your business is in the monopolistic states of North Dakota, Ohio, Washington, or Wyoming, where workers' comp must be purchased through a state-run fund, you'll probably need to add employers liability coverage as an endorsement on your general liability policy.
Learn the difference between workers' comp and general liability.
How does employers liability insurance work?
Employers liability insurance protects business owners against lawsuits related to employee injuries or illnesses that aren't covered by workers' compensation.
In general, employees who accept workers' comp benefits can't sue their employer. However, in extreme circumstances, such as gross negligence, they can. Employees could also sue a third party for their injury, which could result in the third party trying to hold the employer responsible.
For instance, if an employee is hurt because of defective equipment, they could bring a lawsuit against the equipment manufacturer. If the manufacturer believes the employer shares responsibility, they can sue the business. In this case, employers liability would help cover the legal costs.
Workers' compensation and employers liability insurance
Workers' comp and employers liability coverages are usually packaged together on a workers' compensation policy, but they cover different things.
Workers' comp coverage helps pay employee medical bills, lost income, and ongoing treatment for job-related injuries. Employers liability protects your business if you face a lawsuit related to an employee's injury.
What does employers liability insurance cover?
Employers liability insurance protects from:
- Lawsuits connected to workplace injuries or illnesses
- Legal fees and related court costs
- Court judgments and settlements
What third-party claims would employers liability cover?
Someone other than the injured employee may file a suit because of the workplace injury or illness. These third-party claims could include:
- Third-party-over action: If your employee is injured and sues another person or company, like a contractor or parts supplier, that party could file a lawsuit against your business claiming you were partly responsible for the accident.
- Dual-capacity: If you make a product or provide a service that injures an employee or causes them to get sick, they could bring claims against you as both the employer and manufacturer.
- Loss of consortium: Family members of your employee could seek damages for personal loss related to the worker's injury or illness, such as loss of companionship or support.
- Consequential bodily injury: If the employee's original issue results in additional problems, you could be held liable.
What isn't covered by employers liability insurance?
Employers liability insurance doesn't cover all employee-related claims. Specific exclusions include:
- Criminal acts: Criminal conduct by an employer, such as assault and battery or fraud.
- Intentional injuries: Disregarding safety practices or knowingly exposing employees to harm.
- Wrongful termination, harassment, or discrimination: Allegations of wrongful acts like these are covered under employment practices liability insurance (EPLI).
How much does employers liability insurance cost?
The cost of employers liability coverage varies by your business's risk level, which considers your industry, number of employees, claims history, and more. Explore your options for customizing a business insurance policy with Progressive Commercial.
How to get employers liability insurance
For companies that operate in monopolistic states, getting employers liability coverage is relatively easy. Follow these steps:
- Check your state laws regarding workers' comp, and decide whether you need workers' comp.
- Secure workers' comp through the state fund.
- Consult with one of our experts to add an employers liability endorsement to your general liability policy.
Businesses that are not in a monopolistic state can get a workers' comp policy that includes employers liability through Progressive Commercial. See how much an average workers' comp policy costs.
Get an employers liability insurance quote
Find workers' comp and employers liability coverage that works for your business. Call one of our knowledgeable agents or start an online quote today.
