Charles Spinelli on Employer’s Liability Insurance CoverageCharles
Charles Spinelli: All About Employer’s Liability Insurance
To explain an employer’s liability insurance, the basics of workers’ compensation (or workers’ comp) need to be covered. First, Charles Spinelli explains that workers’ comp coverage is mandatory for employers in all states except Texas. You must purchase workers’ comp coverage when you hire your first employee.
Workers’ compensation pays rehabilitation, medical costs, and part of the lost wages if a worker suffers from a health issue or a workplace injury. It provides financial relief for both the employee and the employer by covering all related expenses, no matter the severity of the injury. The death benefits will go to the deceased’s family if an employee dies.
Now, let’s take a look at employer’s liability insurance. This coverage covers the legal expenses when an employee wants to hold their employer responsible for a workplace injury and sues for negligence.
It doesn’t matter whether the employer is liable or not. They still have to pay the legal costs of handling the lawsuit.
Charles Spinelli says this is where the employer’s liability insurance kicks in to pay the legal expenses, such as attorney fees. If the lawsuit goes to trial, the insurance will also pay for any court-awarded damages.
What Does Employer’s Liability Insurance Cover?
As mentioned, an employer’s liability insurance covers negligence claims over occupational injuries or illnesses. When employees get compensated for their workplace injuries, they often decide not to sue the employer. But that is not always the case, notes Charles Spinelli.
Direct claims from employees suing for negligence are just one type of claim that the insurance covers. In addition, there are other types of liability lawsuits that an employer’s liability insurance policy would cover:
Third-party-over action lawsuits: If an employee suffers an injury when using a tool in the workplace, they can sue the manufacturer for making a defective tool, explains Charles Spinelli. But if the manufacturer thinks that poor maintenance of the tool was the cause of the injury, they can sue your company.
Loss of consortium: This type of lawsuit is usually filed by an employee’s family member. If an employee has a serious injury that prevents them from working, their spouse or another family member can sue for negligence.
Dual-capacity lawsuits: For instance, if the employer supplies or manufactures the tool that causes the injury, the employee can sue the business as an employer and a supplier/manufacturer.
Consequential (bodily) injury: Suppose an employee suffers a serious injury, and their immediate family member suffers a heart attack due to the accident. The family member can sue for damages.
Your employer’s liability insurance would cover legal defense costs, judgments, potential settlements, or court-awarded damages.
Charles Spinelli shares important information on business management and other related topics in his blogs. Read them on this page
