Although Workers Comp policies go by the official name of “Workers Compensation and Employers Liability,” it’s easy to overlook the Employers Liability coverage, which protects your business against liability arising from physical injury and occupational illness claims that Workers Comp doesn’t cover.
The Employers Liability section resembles a Commercial General Liability (CGL) policy, defending the employer against claims and paying the employee, dependents, or others in cases of employer negligence. For more on the specific protections available, see Employers Liability Coverage.
Consider these types of claims:
- Action-Over: Let’s assume that Curbside Concrete’s employee is injured in an accident while driving a company mixer and sues the other driver, who then sues Curbside, arguing that a defect in its truck caused the accident. Employees who use tools are especially prone to filing claims of this type: the employee sues the manufacturer of a tool that injured them on the job. The manufacturer then counter-sues the employer for negligence in failing to supervise the employees on the safe use of its tool.
- Loss of Consortium: A seriously injured or dead employee might have a relative or spouse who sues the firm for the resulting loss of normal relations with the disabled or deceased companion. This absence can affect a son or daughter with a mother or father who can no longer fulfill the proper role of a parent, as well as someone whose spouse’s sexual function has diminished.
- Consequential Bodily Injury: A worker’s injury has an adverse effect on one of their relatives. For example, after Joe suffers an injury on the job, his sister must now quit her job to drive him to the occupational therapist every day.
- Dual Capacity: A firm faces a suit beyond its role as the injured worker’s employer. Mike, the building maintenance worker, is injured while installing a basketball hoop in the company gym by a drill manufactured by his employer, Dynamic Drill, Inc. He files a suit against Dynamic as creator of the tool, not as the employer. A dual capacity claim allows Mike to circumvent the prohibition under Workers Compensation law against suing his employer.
These workplace occurrences are not far-fetched. Our risk management professionals would be happy to provide a thorough review of your Workers Comp policy to make sure that you have the protection you need; for specialized maritime operations, see Maritime Employers Liability (MEL) Insurance, or talk to an agent for a policy review.
Frequently Asked Questions
When does Employers Liability coverage apply instead of Workers Compensation?
Employers Liability typically applies when an employee sues the employer for negligence or when a claim falls outside state Workers Compensation statutes.
Can an employee sue my business for a tool defect?
Yes—an employee can sue a third-party manufacturer, and that manufacturer may then pursue the employer in an action-over or related claim.
Does Employers Liability cover family members affected by a worker’s injury?
Some claims such as loss of consortium or consequential bodily injury can expose employers to liability that Employers Liability coverage may address.
How should I start a review of my Workers Comp and Employers Liability limits?
Gather recent payroll and loss history, then discuss exposures and limits with your insurance representative to ensure coverage aligns with your operations.