The 4 Most Common Types of Employers Liability Claims

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When dealing with Workers’ Compensation insurance, there are two components to the insurance policies. The first part consists of Workers’ Compensation insurance, which pays for the medical expenses, as well as wages lost due to the injury. The second part consists of Employer’s Liability insurance, which covers the owner of the business, should the business be blamed as the cause of the employees’ injury/illness.

Employers Liability is coverage provided by the Workers’ Compensation policy for the insured (employer) for liability to employees for work-related bodily injury. Employers Liability protects your business when dealing with being sued over a work related injury or illness. This includes death by accident or disease, other than liability imposed on the insured by a Workers’ Compensation law. 

Should a work-related bodily injury occur, there are the 4 common types of Employer’s Liability claims that you should be aware of:

1. Third Party-Over Action
   A claim in which a contractor’s injured employee sues a third party (ex. project owner), alleging the third party’s conduct contributed to the injury. This action occurs after the injured employee collects workers’ compensation benefits from the contractor. If there is no contract of indemnity between the third-party and the contractor, then the coverage plan would be triggered. However, it is very uncommon for there to be no such contract, so as a result, these third-party claims tend to be passed back to the contractor. This then impacts the contractor’s general liability policy, due to prior agreement.  
   
   
2. Dual Capacity
   In this particular type of claim, the employer or business may have more than one relationship with the employee. For example, the employer could also be the equipment manufacturer, in which the employer could then be sued as the equipment manufacturer, as well as being liable under the workers’ compensation law.
   
   
3. Consequential Bodily Injury
   A type of lawsuit where a family member of an injured employee alleges, they suffered an injury (i.e., heart attack, stroke) as a direct result of the employee’s injury.    
   
   
4. Loss of Consortium
   A legal action brought by the injured worker’s spouse or family. Usually, the suit alleges loss of spousal services, including but not limited to companionship.

Having good Workers’ Compensation and Employer Liability coverage is key to minimizing your work related injury claims. If you’re interested in learning more about Employer Liability or other insurance coverage, contact TSIB for a free risk assessment. 

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