Employer’s liability insurance is an additional coverage that business owners can purchase to protect their assets against any employee claims due to injury or harm as a result of their employment. The insurance will help pay for legal fees associated with your defense against any such claim.
In many states it is required that businesses have worker’ compensation and employers liability insurance. Any employer is liable when an employee suffers an injury at work or develops an occupational disease covered by workers’ compensation laws. If an employee is injured while working, they are guaranteed funds to pay for medical costs and some percentage of lost wages. At the same time, liability insurance will also cover all the liabilities the business might deal with due to work-related employee injuries.
Now it is important to understand that workers’ compensation and employers’’ liability insurance are two different things. Workers’ compensation insurance provides payments to employees who suffer a work-related injury or occupational illness. Employers’ liability insurance, which might be part of the WC policy, protects the business against lawsuits due to employment-related injuries or illnesses. The lawsuits can come from the employee, or third parties. These two coverage types are typically bundled together.
Employers’ liability insurance will not cover a business against claims such as wrongful dismissal, sexual discrimination or anything that is not injury or illness related. The medical care, temporary disability benefits, permanent disability benefits and these types of payments are paid with the workers’ compensation benefits.
Workers’ compensation insurance also can cover employees injured in other states than the state where the business operates, which is important because many states have differing workers’ compensation laws.
Insurance carriers take several factors into consideration when calculating premiums for employers’ liability insurance. Premiums will vary depending on the size of the business, the hazards of the work environment, amount of payroll, and the number of employees that are covered. The business is also given a class code(s), which is dependent upon the work duties involved.
If you are a business owner it is important to understand what laws your state has when it comes to workers’ compensation and employers’ liability coverage. Sitting down with your local independent business insurance agent can help sort through these laws and help you find a policy that will protect you and your employees for the most efficient premium.
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Enhanced Insurance is not written by attorneys. If you’re looking for legal advice, you need to contact a lawyer. Further, insurance practices and forms change constantly and are varied from state to state. For definitive answers in your area, contact a local agent.
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