As an employer, it’s crucial to protect your business and employees from unforeseen liability risks. That’s where employer liability insurance comes in. This type of insurance is designed to protect your business from financial losses arising from claims made by your employees. In this article, we’ll cover the basics of employer liability insurance, including what it is, what it covers, and how to get it.
What Is Employer Liability Insurance?
Employer liability insurance, also known as workers’ compensation insurance, is a type of insurance policy that covers your business from claims made by your employees. It covers a range of incidents, including injuries or illnesses that occur in the workplace, as well as injuries or illnesses that occur outside of work but are still work-related.
Employer liability insurance is mandatory in most states, and it’s designed to protect both employers and employees. If an employee suffers an injury or illness while on the job, employer liability insurance will cover the costs of their medical treatment, rehabilitation, and lost wages. In exchange for this coverage, employees are typically not allowed to sue their employers for workplace accidents or injuries.
What Does Employer Liability Insurance Cover?
Employer liability insurance covers a range of incidents, including:
An employee falls off a ladder and breaks their leg while stocking shelves
An employee develops carpal tunnel syndrome from typing at their desk all day
Work-Related Injuries or Illnesses Outside of Work
An employee injures their back while lifting boxes at home for work purposes
Employer liability insurance typically covers the costs of medical treatment, rehabilitation, lost wages, and other related expenses. It may also cover legal fees if an employee sues your business for a workplace accident or injury.
What Does Employer Liability Insurance Not Cover?
While employer liability insurance covers a range of incidents, there are some things that it does not cover, including:
- Intentional acts of violence or harm
- Employee misconduct, such as theft or fraud
- Independent contractors or freelancers
- Employees working outside of their job duties
- Claims made by family members or other non-employees
If you need coverage for these types of incidents, you may need to purchase additional insurance policies or riders.
How Do You Get Employer Liability Insurance?
The process of getting employer liability insurance varies depending on your location and the type of business you run. In most cases, you can purchase a policy from a licensed insurance provider, either online or in person.
Before purchasing a policy, it’s important to review your state’s laws and regulations regarding employer liability insurance. You’ll need to determine how much coverage you need, what types of incidents are covered, and how much you can afford to pay in premiums.
What is the difference between workers’ compensation and employer liability insurance?
Workers’ compensation insurance and employer liability insurance are often used interchangeably, but there is a difference between the two. Workers’ compensation insurance specifically covers workplace injuries and illnesses, while employer liability insurance covers a broader range of incidents, including workplace injuries and illnesses as well as work-related injuries or illnesses that occur outside of work.
Is employer liability insurance mandatory?
Employer liability insurance is mandatory in most states, but the specific requirements vary. Some states require all employers to carry employer liability insurance, while others only require it for certain types of businesses or industries. Check your state’s laws to determine if you need employer liability insurance.
How much does employer liability insurance cost?
The cost of employer liability insurance varies depending on your location, the type of business you run, and the amount of coverage you need. In general, premiums are based on the number of employees you have, the types of jobs they perform, and the risks associated with those jobs. You can get a quote from an insurance provider to determine how much it will cost for your business.
What happens if you don’t have employer liability insurance?
If you don’t have employer liability insurance and an employee suffers an injury or illness on the job, you may be held responsible for paying their medical bills, lost wages, and other related expenses. You may also be sued by the employee or their family members for damages. In some cases, not having employer liability insurance can result in fines or penalties from your state’s Department of Labor.
How can you reduce your risk of liability claims?
There are several things you can do to reduce your risk of liability claims, including:
- Create a safe work environment with proper training and equipment
- Implement policies and procedures for reporting and investigating incidents
- Provide medical treatment to injured employees as soon as possible
- Keep accurate and detailed records of all incidents and medical treatments
- Stay up-to-date on your state’s laws and regulations regarding employer liability insurance
By taking these steps, you can help protect your business and employees from liability risks.
Employer liability insurance is a crucial part of protecting your business and employees from liability risks. By understanding what it is, what it covers, and how to get it, you can make sure you have the coverage you need to keep your business safe. If you’re in the process of purchasing employer liability insurance, be sure to review your state’s laws and regulations and get a quote from a licensed insurance provider to determine the amount of coverage you need.