Employer's liability insurance is a policy that most companies find necessary to purchase. Some people refer to this policy as worker's compensation. Although the two are packaged together, employer's liability insurance covers more than employees. Accidents and injuries can happen on the job at any time and that makes it essential for the functionality of a business to have a sound policy just in case.
The Facts
Employer's liability insurance is an insurance policy that protects employers from liabilities arising from disease, fatality, or injury to employees resulting from workplace conditions or practices. This insurance comes in three phases: comprehensive, professional, and property liability insurance. Worker's compensation insurance is also part of the insurance policy. Comprehensive or general liability is usually limited to bodily injury and illness from working on the job or damage to property. It can be combined with property insurance to insure against accidents at the workplace or at places your business is conducted. Professional liability protects business from "errors and omissions" or "negligent acts" by the company. Such acts include malpractice, and accounting and investment errors. Professional liability insurance can be referred to as professional indemnity insurance. Claims under this part of the insurance are typically more expensive than comprehensive claims.
Benefits
This insurance provides employers with a safety net in case something catastrophic happens, such as a flood or a fire. Employer liability insurance is designed to help employers pay for injuries and accidents that occur at the workplace. An insurance company will take on the burden of payment only after doing its own thorough investigation; insurance companies do this to eliminate frivolous claims. Some of these claims, just or not, can cost companies a lot of money, and without protection in place, some may fold from the financial obligation.
Considerations
The policy pays the claimant for medical costs and other expenses associated with the claim. It also provides financial protection for companies against damages done to property. The purpose of insurance is to make someone or something whole again. In exchange for insurance protection, the company is required to pay a premium. The amount of premium payments depends on the amount of coverage that is offered by the insurance company after considering risk.
Misconceptions
Having liability insurance, like most insurance options, is a choice. If it isn't required by law, many people and businesses struggle with the prices of premiums but pick up insurance because of what could happen if they don't. Employer's liability insurance is not a policy that should be overlooked. Given that incidents are bound to happen and judgment awards are increasing, especially in the health and financial industries, having an insurance company in your corner can help your business through a tough time. It's no wonder that the two previously mentioned industries are required by legislation to have this insurance since they have been slammed with some significant judgments in recent years.
Warning
Some companies are required by law to have employer's liability insurance. The companies who are not required by law to purchase insurance and choose not to carry it face a big risk of an unfortunate event being compounded by huge lawsuits; they may have to pay out incredible sums of money. It is a good option to shop around for a policy that provides a reasonable enough payout in case something happens.
