Employers Liability Insurance - Protection From Employee Lawsuits
Accidents can happen in a split-second, even to business owners who take every precaution to create a safe workplace. That's the reason that many states require business owners to have employers liability insurance.
Employer's liability insurance is a kind of coverage through which employers are protected from liabilities arising from disease, fatality, or injury to employees resulting from workplace conditions or practices.
For instance, suppose somebody spills their coffee in the employees' break room and fails to clean up the spill promptly. A co-worker comes along, slips in the spilled coffee, and falls hard to the tile floor, breaking a hip.
And it's for these expected and unexpected cases of risk that employer's liability insurance was created.
Employer's liability insurance comes under a classification called "risk financing." Today many large corporations, and even small- or medium-sized companies, employ people to monitor the business for potential liability and manage its insurance policies. These employees are known as risk managers.
The practice began when individuals or companies facing common risks banded together to create a fund to compensate any member that suffered loss. For instance, the famous insurance firm Lloyd's of London was founded by a group of shipping company owners to repay its fund subscribers when ships were lost at sea. Today there are insurance carriers, including Lloyd's, who specialize in liability insurance.
In employer's liability insurance, the business owner pays a premium to the insurance carrier to be protected against an employee's loss due to workplace injury or accident. This is called a "third-party claim" in the insurance industry, since the claimant is legally not a party to the insurance contract. Usually an employee injured on the job seeks to get back any uncovered medical expenses, lost wages or other economic losses as the result of a workplace injury or illness caused by working conditions.
However, when a claim is made, the insurance carrier may choose to defend both the insured and itself. A legal battle might ensue if a liability were more complex and severe than the simple example outlined above.
Some examples of businesses in which employer liability insurance is mandatory include trucking companies, professional services such as counselors, physicians and others, factories, and building contractors. The legal reason behind compulsory liability insurance in these cases is that the business engages in practices that put others at risk.
Employer's liability insurance is a kind of coverage through which employers are protected from liabilities arising from disease, fatality, or injury to employees resulting from workplace conditions or practices.
For instance, suppose somebody spills their coffee in the employees' break room and fails to clean up the spill promptly. A co-worker comes along, slips in the spilled coffee, and falls hard to the tile floor, breaking a hip.
And it's for these expected and unexpected cases of risk that employer's liability insurance was created.
Employer's liability insurance comes under a classification called "risk financing." Today many large corporations, and even small- or medium-sized companies, employ people to monitor the business for potential liability and manage its insurance policies. These employees are known as risk managers.
The practice began when individuals or companies facing common risks banded together to create a fund to compensate any member that suffered loss. For instance, the famous insurance firm Lloyd's of London was founded by a group of shipping company owners to repay its fund subscribers when ships were lost at sea. Today there are insurance carriers, including Lloyd's, who specialize in liability insurance.
In employer's liability insurance, the business owner pays a premium to the insurance carrier to be protected against an employee's loss due to workplace injury or accident. This is called a "third-party claim" in the insurance industry, since the claimant is legally not a party to the insurance contract. Usually an employee injured on the job seeks to get back any uncovered medical expenses, lost wages or other economic losses as the result of a workplace injury or illness caused by working conditions.
However, when a claim is made, the insurance carrier may choose to defend both the insured and itself. A legal battle might ensue if a liability were more complex and severe than the simple example outlined above.
Some examples of businesses in which employer liability insurance is mandatory include trucking companies, professional services such as counselors, physicians and others, factories, and building contractors. The legal reason behind compulsory liability insurance in these cases is that the business engages in practices that put others at risk.
About the Author:
To protect your company you may need employee liability insurance as well as directors and officers liability insurance. Both protect employees, just in different ways.
You like it? Share it!
posted by SolveItQuick at
12:14 PM
0 Comments:
Post a Comment
<< Home