By michael vivar
Employers' liability insurance is a crucial type of protection designed to mitigate financial loss if an employee suffers work-related injury or illness.
Ideally, it's supposed to cover costs for employee medical expenses not renumerated by worker's comp and preclude any legal recourse.
The worst-case scenario is when an employee sues an employer for negligence. Employers' liability insurance can provide measures when defending a civil suit.
Without liability insurance, an employer becomes vulnerable to devastating reputational and financial damage that can destroy a business. Here is why the protection is indispensable.
Liability insurance will cover the exorbitant costs of legal defense. This can be hundreds or thousands of dollars per billable hours per attorney.
Attorneys may advise settlement is preferable to a prolonged court battle. Most liability insurance covers what providers deem a reasonable settlement amount.
Plans often cover suits brought by family members of employees who claim damages tangentially resulting from injury to the directly affected first party like mental distress.
The employer isn't a direct defendant but is party to a separate lawsuit. For example, when the manufacturer of equipment used in the employer's workplace is found liable.
Employers' liability insurance normally applies to issues with directly hired W2 employees. Workplace injuries sustained by independent contractors aren't often covered.
Employers' liability insurance should be a measure of last resort. Prepare for any eventualities but provide a safe work environment and treat workers well.