The policy helps pay a business owner's costs arising from the legal liability for damages and/or death or injury sustained whilst at work.

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The employer's liability insurance policy covers the legal liability of the insured "employer" for bodily injury or death of any employee directly engaged in his service, under an employment or training contract during the insurance period, which arises during and because of the exercise of his specified work with the insured in the activity.

The Employers' Liability Policy covers the legal liability of the organization for accidental bodily injury that occurs to employees due to negligence arising out of and during work.

The employer is compensated in respect of all amounts that he is legally liable to pay as damages, costs and expenses of the plaintiff arising from accidental bodily injury occurring during the insurance period in connection with the course of work.

What is an Employer's Liability Insurance Policy?

An employer's liability insurance policy is an insurance policy that deals with claims of workers who have suffered a work-related injury or illness that is not covered by the workers' insurance policy.

It is a type of liability insurance, which can be added to workers' compensation to further protect companies against costs associated with workplace injuries, illness and death.

However, the employer's liability insurance policy does not cover the legal costs of employee claims accusing of racial discrimination, sexual harassment or unlawful acts To cover these cases, the employer will need to purchase a separate type of insurance policy called Employment Practices Liability Insurance (EPLI).

Key Points of Employer Insurance Policy

  • Employers' liability insurance covers companies against costs and claims by employees that are not covered by workers' compensation.

  • Many companies choose to take on employers' liability insurance to help cover legal costs and lawsuits.

  • Most workers' compensation insurance policies automatically include employer liability insurance.

  • Employer's liability insurance places limits on the amounts paid per employee, accident or policy.

How does the Employer's Liability Insurance Policy work?

The majority of private sector employees are covered by nationwide workers' compensation laws, with most countries requiring most employers to carry workers' compensation insurance mainly.

The employer's liability insurance policy provides compensation to workers with a certain level of coverage for medical expenses and lost wages for employees or their beneficiaries when an employee is injured, sick, or dies as a result of their employment.

This is where the primary role of an employer's insurance policy emerges: it is designed to deal with expenses that fall outside the scope of workers' compensation or public liability insurance laws, and provides additional protection against financial losses of the company or business.

What are the exclusions not covered by the regular employer's liability policy?

The usual employer's liability insurance policy will not cover all injuries that occur due to the following reasons:

  • Wars and invasions

  • Hostilities, civil wars and revolutions.

  • Claims arising from the use of asbestos or asbestos-containing materials.

  • Liability assumed by the contract (unless liability arises in any case in the absence of the contract).

  • Fines, penalties, lump sum damages and punitive or discretionary damages.

  • Responsibility for working abroad.

  • Pollution (unless caused by sudden, specific, unintentional and unexpected causes).

  • Nuclear or radiation exposure.

  • Jurisdiction.