

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.

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.

When should I hire a Workers Comp Lawyer?

Source: Unsplash

Insurance Policies and their differences



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.

Hearing Protection At Work. Man cutting metal in protective gear on work.

Source: Pexels

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.

1. Retail

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.

2. Restaurant

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.

4. Manufacturing

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.

5. Healthcare

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


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.








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