Employer Liability Insurance: What You Need to Know

In the realm of business, protecting your employees and your company from unforeseen risks is paramount. One crucial aspect of this protection is employer liability insurance. Understanding what it entails, who needs it, and its scope of coverage is essential for any business owner. Let's delve into the specifics!

What Is Employer Liability Insurance?

Employer liability insurance, often referred to as employers' liability insurance (ELI), is a type of coverage designed to protect businesses from financial losses arising from employee claims of work-related injuries or illnesses not covered by workers' compensation insurance. While workers' compensation covers medical expenses and lost wages for employees injured on the job, employer liability insurance deals with legal expenses incurred from employee lawsuits over workplace injuries or illnesses.

Who Needs Employer Liability Insurance?

In most jurisdictions, employer liability insurance is mandatory for businesses that have employees. This requirement typically applies regardless of the size or nature of the business. Whether you run a small family-owned enterprise or a large corporation, having employer liability insurance is crucial to shield your business from potentially devastating legal costs.

Does Employers Liability Insurance Cover Workers Compensation?

Employers' liability insurance does not cover workers' compensation benefits. Workers' compensation is a separate insurance policy that compensates employees for medical expenses and lost wages resulting from work-related injuries or illnesses. Employer liability insurance, on the other hand, covers legal expenses arising from employee lawsuits alleging negligence on the part of the employer.

What Is Covered by Employer Liability Insurance Policy?

Employer liability insurance typically covers legal fees, court costs, and settlements or judgments awarded to employees in cases where the employer is found liable for workplace injuries or illnesses. It may also provide coverage for legal representation during investigations by regulatory authorities, such as OSHA (Occupational Safety and Health Administration).

How Much Does Employer Liability Insurance Typically Cost?

The cost of employer liability insurance varies depending on factors such as the size of the business, the industry it operates in, the number of employees, and the level of coverage required. On average, premiums for employer liability insurance can range from a few hundred to several thousand dollars annually. Smaller businesses with fewer employees may pay lower premiums, while larger businesses with higher risk exposure may face higher costs.

In conclusion, employer liability insurance is a vital component of risk management for businesses with employees. By providing financial protection against legal claims from injured or ill employees, it helps safeguard the financial stability and reputation of the business. While the cost of insurance may be a concern for some businesses, the potential savings in legal expenses and the peace of mind it brings are invaluable. Therefore, it's essential for business owners to prioritize obtaining adequate employer liability insurance coverage to mitigate potential risks and liabilities in the workplace.

Let us help you protect your business with employer liability insurance and keep your mind at ease. At Tivly, our goal is to help you find protection for your business as efficiently as possible by matching you with the right insurance provider. Simply give us a call at 877-907-5267 or complete the form above and one of our specialists will contact you right away.

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