Here’s why you need employer’s liability insurance.
If you run your own business, then you probably know that your business needs the protection offered by worker’s compensation insurance. However, what you may not know is that worker’s compensation insurance can actually be split into two parts. The first part covers things like medical costs and lost wages if an employee is injured. The second part, known as employer’s liability insurance, is meant to protect against lawsuits. While these two parts are normally included together, some states might require you to purchase each policy separately. If this is true for your state, don’t write off employer’s liability insurance; here are some reasons why you need this coverage.
Third-Party Counter Suits
Imagine a scenario in which an employee is injured while working with a specific piece of equipment. In this case, the employee might choose to sue you and the manufacturer of the equipment. In response, the manufacturer might then sue you, claiming that the incident was caused by your negligence. This scenario is known as a third-party countersuit. In this situation, you would need employer’s liability insurance to cover the costs associated with these various lawsuits.
Loss of Consortium
If an injured employee is receiving workers compensation benefits from you, then they usually cannot sue you. However, their spouse can. The spouse of an injured employee can sue you, claiming that they have suffered as a result of their partner’s injuries. This situation is known as loss of consortium and this tricky legal situation is covered by employer’s liability insurance.
Dual Capacity Suits
If an employee is injured by a product that your company manufactured, then they can sue you both as an employer and a manufacturer. While standard workers compensation cannot cover this type of complicated suit, employer’s liability would have you covered.
These are some of the situations in which it would be important to have employer’s liability insurance. If you have questions regarding your business insurance, then contact us at Valley West Insurance. We are ready to assist you with all your insurance needs.