What is employer liability cover and why does a business need it?

Many businesses get caught with their insurance pants around their ankles in the event of the unthinkable and unexpected happening. That is why you need to ensure that you have all your adequate insurance policies in place.

One of these important policies is your employer liability cover. This type of insurance covers all the business owners of the business financially in the event where they can be held liable for damages an employee sustained during the course of their employment. This can include accidents during which an injury was sustained, illness or even death.

So why and when do you need this in your business and how is this different from Worker’s Compensation?

  • Employer’s Liability Insurance (EL) provides coverage to the employer for any work-related bodily injury or disease aside from the liability that is already imposed on the employers by the workers compensation law. In the event of an employer liability claim it has to be proven that employer negligence occurred to cause the injury.
  • Sudden unexpected costs (especially when it comes to legal expenses) can be crippling to a business. It’s much better to be prepared and have that peace of mind that you will be covered if an unfortunate event should occur. If you are a company that employs people (whether 1 or 100), you need to have an employer liability policy in place.
  • If you are in a B2B industry many clients and joint venture partners require that you have employer’s liability cover in place before they work with you.
  • Contractors that are working on-site, using your materials and who are under your authority for the period of their contract, is also legally considered employees when it comes to liability claims. These individuals must also be taken into consideration when taking out your employer liability insurance.
  • Certain industries have higher risks of accidents and illnesses such as the construction, engineering and medical industries. If you are in a high-risk industry and do not have employer liability coverage yet we recommend that you contact a professional as soon as possible in order to put the proper policies in place.

Being business owners can be a risky business and it’s our responsibility to both keep our employees safe and keep ourselves protected against potentially unplanned circumstances or situations. To find out more about employer liability insurance and which option is the best fit for you and your business, contact us here.