As an employer, it’s your responsibility to make sure your workers are both healthy and safe on the job. Unfortunately, accidents can be common even in otherwise safe industries, making workers’ compensation coverage a necessity. These policies have two primary parts—Part One: Workers’ Compensation Insurance and Part Two: Employers’ Liability Insurance.
This Work Comp Insights will discuss Part Two, giving you a better idea of what’s covered under your policy.
Part Two and What It Covers
The primary purpose of workers’ compensation insurance is to make sure that injured workers receive medical care and benefits if they are injured on the job and become unable to work (Part One). However, employees might still sue your company for damages if they feel negligence on your part caused the injury in the first place. That’s where Part Two of workers’ compensation insurance steps in.
Part Two, often called employers’ liability insurance, protects your organization in the event employees file a lawsuit after an on-the-job accident that’s not subject to state statutory benefits.
This facet of workers’ compensation insurance coers court costs, attorney’s fees, and settlements or judgments. Employers’ liability coverage may be especially useful for a wide variety of claims, including:
- Third-party action—If a worker gets injured at work, they may not sue you directly. Instead, they could sue a third party who could then file their own separate lawsuit against you. For example, if an employee injures themselves on machinery, they could sue the manufacturer of the equipment. The manufacturer could then sue you if they think your negligence caused the accident.
- Loss of consortium—If an employee is hurt, a spouse may file a lawsuit for injuries that cause a loss of a family relationship. For example, should an employee be seriously injured or killed on the job, employers’ liability coverage can afford a level of protection.
- Dual-capacity suit—These lawsuits occur when an employer and worker have multiple relationships. A common example of this is when an employee is hurt by a product that the organization manufacturers. In this case, the company could be held liable both as a manufacturer and an employer.
- Consequential body injury—These types of claims are concerned with consequential damages associated with the initial accident. For example, a spouse may sue your organization if the injury to their loved one negatively affects their own health (e.g., elevated blood pressure).
Not all workers’ compensation policies automatically include employers’ liability coverage. As such, it’s important to talk to a qualified insurance broker who can help you better understand your coverage in order to identify any gaps.
For more information, contact Foy & Associates today.
This Work Comp Insights is not intended to be exhaustive nor should any discussion or opinions be construed as legal advice. Readers should contact legal counsel or an insurance professional for appropriate advice. © 2019 Zywave, Inc. All rights reserved.
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