Do You Need Employer’s Liability Insurance?

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Do You Need Employer’s Liability Insurance?

Find out why you need the coverage offered by an employer’s liability insurance policy.

As a business owner, you probably know that you need the protections offered by worker’s compensation.  However, did you know that workers compensation insurance is actually split into two parts?  The first part covers things like medical costs and lost wages.  The second part, known as employer’s liability insurance, is specifically meant to cover lawsuits.  While these two forms of insurance are normally included together, some states might require you to get each policy separately.  If this is the case, then don’t write off employer’s liability insurance.  Here are some of the reason why you need this coverage.

  • Third Party Countersuits

If an employee is injured while using a piece of equipment, then they might choose to sue you and the manufacturer of the equipment.  In response, the manufacturer might sue you, claiming that any equipment malfunction was due to your negligence.  This is known as a third party countersuit.  In this situation, regular workers comp would not cover your legal fees.  Luckily, employer’s liability insurance would.

  • Loss of Consortium

Generally, an injured employee cannot sue you if they are receiving workers compensation benefits.  However, the spouse of an injured employee can still sue, claiming that they have suffered as a result of their partner’s injuries.  This is known as loss of consortium.  This type of legal situation is also covered by employer’s liability insurance.

  • Dual Capacity Suits

If an employee is injured by a product that you manufacture, then then can sue.  In this case, you are liable both as a manufacturer and an employer.  While standard workers compensation cannot cover these complicated suits, employer’s liability would have you covered.

These are some of the situations in which you need employer’s liability insurance.  If you have more questions regarding your commercial coverage, then contact us at Reata Insurance Group.  Our dedicated team is ready to assist you with all your coverage needs.

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