insurance

Employer's Liability

Insurance coverage that protects employers from lawsuits by employees for work-related injuries or illnesses that aren't covered by workers' compensation. This coverage fills gaps where workers' compensation may not apply or may be insufficient.

Example

“The construction company's employer's liability insurance covered the lawsuit costs when a worker sued for injuries that occurred during his lunch break, which wasn't covered by workers' compensation.”

Memory Tip

Think 'EMPLOYER LIABLE for what WORKERS COMP misses' - this coverage handles employer liability that falls outside workers' compensation protection.

Why It Matters

Employer's liability insurance protects businesses from potentially devastating lawsuits that could arise from workplace injuries, especially in situations where workers' compensation doesn't provide coverage. Without this protection, employers could face unlimited liability for employee injury claims.

Common Misconception

Many employers think workers' compensation insurance covers all possible employee injury claims, not realizing that certain situations fall outside workers' comp coverage and could result in expensive lawsuits. They also often confuse this with general liability insurance, which covers third-party claims rather than employee claims.

In Practice

ABC Manufacturing has both workers' compensation and employer's liability coverage with $1 million limits. When employee John is injured in a machine accident, workers' comp covers his medical bills and wage replacement totaling $75,000. However, John's wife also sues the company for loss of consortium, seeking $500,000 in damages. Since this spousal claim isn't covered by workers' compensation, the employer's liability coverage kicks in to defend against and potentially pay this lawsuit.

Etymology

From 'employer,' one who employs others, combined with 'liability' from Latin 'ligare' meaning 'to bind,' referring to legal responsibility or obligation to pay damages.

Common Misspellings

employers liablityemployer's liabiltyemployers liabillityemployer's liabiity

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