Employer’s liability insurance covers legal defense costs when an employee blames a business’s negligence for their injury or illness. Those costs usually include hiring a lawyer, court fees, and paying a judgment or settlement.
For example, a firefighter could file a lawsuit over hearing loss from a faulty siren noise, or a restaurant chef could sue over a burn caused by a faulty fryer.
In either case, workers’ comp would pay for medical bills and part of the wages lost while the employee recovers. If an injured employee thinks your negligence caused their health issue, they might sue for punitive damages like pain and suffering. That’s where the employer’s liability activates.
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Definition of the Contractors
There are contractors that get hired by larger companies that are in need of their expertise. These contractors provide their services to large or small companies that lack the same.
This type of collaboration between contractors and companies is contract-based. Once the contract is formed, the work begins. But note that the contractors have different employment statuses and different relationships with the company, compared to the full-time employed workers.
Contractors work for their own companies, and they are being outsourced by other companies. They are not considered as employed, by the company that is hiring them, and they can not benefit from some factors, that full-time workers do.
This has a huge career impact on the contractors, both positive and negative.
Insurance Policies and their differences
The insurance policy is a contract between the insurer and the policyholder, which determines the claims which the insurer is legally required to pay. In exchange for an initial payment, known as the premium, the insurer promises to pay for loss caused by perils covered under the policy language.
Insurance contracts are designed to meet specific needs and thus have many features not found in many other types of contracts. Since insurance policies are standard forms, they feature boilerplate language which is similar across a wide variety of different types of insurance policies
The main difference between contractors and full-time employees is the insurance policies. Contractors are not protected, nor they have any other work benefits from the company that is outsourcing them, other than being paid for.
This is where Employer’s liability insurance comes in. It is very common that the workers are acting as employees for the contracting company.
Continue Reading: All About Workers’ Compensation >
Types of Insurance Policies
- Car Insurance
- Home Insurance
- Life Insurance
- Disability Insurance
- Health Insurance
- Long-Term Care Insurance
- Liability Insurance
Importance of Employer’s Liability Insurance
The reason why an employer’s liability is so important is because of its scope. The legal definition of an ’employee’ is very wide, and this makes a business much more vulnerable than its owner may realize.
There have been cases in the past where family members have been doing favors for their kin, only to receive injuries and later make a claim.
As we have seen, it only takes one bottle of cleaner without a top on to cost a business over $10,000 and so it would be ill-advised for a business to disregard the cover that would protect them in such an event.
It is also important that a business prevents such accidents from occurring by closely monitoring their health and safety practices so that those responsible for enforcing them can be disciplined where standards are not being met.
Coverage of Employer’s Liability Insurance
Employers’ liability insurance will usually cover other damages outside of workers’ compensation if an employee is injured or becomes ill while on the job.
Depending on the size of the company, these employee benefit plans can involve group medical insurance, group life insurance, group disability insurance, group dental insurance, and group vision insurance. Policies differ based on the providing insurance company, but most employers’ liability policies usually cover:
- Lost wages
- Medical expenses
- Rehabilitation costs
- Funeral expenses
- Death benefits
Most states in the U.S. require employers who have at least one employee to acquire workers’ compensation. However, some states allow employees the option to stop being involved in it.
When an employee chooses to stop being involved in coverage, they gain the right to sue the employer for damages if they become ill or injured on the job.
Section 125 plans that allow employees through a cafeteria plan to structure their own personal coverages and benefits are also considered under this employee benefits liability policy.
Usually, most of the claims come from clerical errors from not adding or deleting the employee coverages as required or requested by the employee.
Commercial enterprises, professional services firms, and not-for-profit organizations that do not currently have Employment Practices Liability insurance are unnecessarily exposing themselves to real economic risk.
The cost associated with defending just one employment practice liability claim may often outweigh the insurance premium required to provide both defense and indemnification protection.
The cost-benefit analysis is compelling. Companies that currently purchase EPL (Employment Practices Liability) insurance, should have an expert evaluation of their operational exposures to ensure the policy they have in place will be responsive to their particular business risks.
5 Industries that Need Employer’s Liability Insurance
The following five industries are top of the list for a must-have Employer’s Liability Insurance.
No matter if you’re selling clothes, cell phones, or sporting goods, most retailers have a workforce that spans from teens to seniors. Therefore a potential employee claims are age discrimination, harassment, failure to promote, and wrongful termination.
Gender discrimination, retaliation, harassment, and unfair wage practices often occur in a food service environment. Denying an employee an advancement opportunity, or failing to accommodate employees or customers with disabilities are actions that would be grounds for a lawsuit.
3. Professional Services
Being denied an advancement opportunity, or experiencing the unfair treatment of any kind won’t sit well with today’s professionals, according to the Insurance Journal.
Common claims in this industry are harassment, gender and age discrimination, failure to promote, and wrongful termination.
From apparel makers to industrial equipment producers, businesses with employees of different ages, genders, and ethnicities must respect their employees’ rights or face potentially damaging claims.
Medical, dental, and chiropractic care practices need protection from discrimination, harassment, and wrongful termination claims.
Continue Reading: Occupational Noise Exposure Among Road Construction Workers >
Hearing Loss Workers Compensation Benefits
The Workers Compensation Program was established in 1911 to encourage employers to make the workplace safer by requiring safety programs and the use of safety devices.
Since 1911, there have been over 2.5 million workers’ compensation claims filed. Hearing loss workers compensation claims now rank #3 in the number of occupational disease claims filed.
Hearing loss workers’ compensation benefits are largely undiscovered benefits covering hearing health care, which is often uninsured. Many health insurance policies and programs like Medicare do not cover hearing aid purchases but workers’ compensation can.
It also pays for the disability of hearing loss just as it does for the loss of eyesight or other injuries.
Aging populations, advances in technology, and greater sensitivity to hearing loss are bringing more attention to financing hearing health care. For the most part, those who qualify for hearing loss workers’ compensation benefits are retired hearing-impaired workers who live on fixed incomes.
Always feel free to ask Johnson Law Offices about the process, the law, or an individual case. The legal, medical, and audio-metric questions that come into play in a hearing loss workers compensation claim can be complicated.
The claims require attention to detail mixed with an ability to work well with hearing-impaired retirees and their families, especially spouses, and their hearing health care professionals.