| January 2011 | Past Issues | Advertise | Affiliates Search | PCOC.org |
|
EMPLOYERS' LIABILITY Workers' comp policies usually include a special section for employers' liability. What additional coverage does it provide and why do you need it?
Although workers' comp is designed to be the "exclusive remedy" for work-related illness and injury, some work-related claims fall outside of workers' compensation coverage. The employers' liability section of your workers' comp policy adds coverage for these claims. Without this coverage, you would have a significant coverage gap, because commercial general liability policies specifically exclude coverage for work-related injury and disease. Since states do not require employers' liability insurance, you do not have it unless your workers' compensation policy explicitly states it includes this coverage in a separate section. Unlike workers' comp, employers' liability has a defined limit of liability, starting at $100,000 per injury.
WHEN COVERAGE APPLIES Employers' liability is a common law or tort liability, and insurance companies handle those types of claims in the same way they adjust general liability claims, including managing and paying for defense. Insurance authority IRMI cites several examples of when employers' liability coverage applies: Wrongful death: The family of a deceased worker may file a common-law claim seeking damages in addition to the death benefit paid by workers' comp. Consequential bodily injury: A family member may file a lawsuit for his or her own injury (for instance, a heart attack) that was caused by learning about or dealing with the injured employee. Loss of consortium: The spouse of an injured worker may sue for loss of consortium, which means the spouse has lost the services — such as sexual relations or the ability to do household chores — of his or her spouse. Damages can be awarded even if the spouse is receiving disability payments. Third-party liability: If an employee is injured while using equipment that malfunctioned, he or she may sue the manufacturer of the equipment for negligence. The manufacturer may in turn sue the employee's company to recover damages. Depending on the specifics of the claim, either the employers' liability or a general liability policy can provide coverage. Employees excluded from workers' comp: In some states, seasonal and temporary workers can be excluded from workers' comp. In other states some small employers do not have to buy comp. In those situations, an employers' liability policy can provide protection from employee lawsuits for bodily injury and illness.
California businesses that have operations in states with monopolistic workers' comp funds (North Dakota, Ohio, Washington and Wyoming) need to buy an employers' liability endorsement to their policy to avoid having a coverage gap for employees in those states.
NOT EMPLOYMENT PRACTICES LIABILITY
Do not confuse employers' liability with employment practices liability (EPL) insurance, which protects an organization when employees file claims for wrongful termination, sexual harassment and discrimination. Some employers that have not bought EPL insurance attempt to use their employers' liability to provide coverage for EPL claims. However, EPL does not cover bodily injury. Even when states define workers' comp "injury" to include mental injury, the broader, workers' compensation definition does not necessarily transfer to the employers' liability portion of the policy. If you have any questions about employers' liability coverage, or other portions of your workers' comp policy, please call the PCOC Insurance Program department at Jenkins Insurance Services at (800) 234-6363. |
Print this ArticlePest Control Operators of California |
 |
