Workers’ Compensation VS Employer Liability

Do you know the difference between workers’ compensation and employer liability?

Workers’ Compensation establishes the liability of employers, through state statutes for injuries to workers while injured on the job and illnesses due to employment, and is a requirement of employers to protect the workers injured on the job. Workers’ compensation provides coverage for medical costs, a percentage of lost wages, costs of rehabilitation, retraining, and payment for any permanent injury, whether full or partial and based on an assessment of limitation of the injury of the employee. Negligence of the employer is not a consideration in workers’ compensation. It is considered an absolute liability for medical coverage.

Workers’ Compensation Acts do provide a system of hearings and judicial decisions by administrative law judges and appeal boards. As a result of these proceedings, if workers’ compensation is awarded, it is the only remedy against an employer and does not include damages for pain and suffering.

Employer’s Liability Insurance protects an employer from damages from a lawsuit resulting from an injury due to the employer’s negligence. The injured worker may waive workers’ compensation and sue the employer for losses if this is the case. Additional examples of where employers liability can protect an employer are as follows; Third-party countersuits (employee is injured by faulty equip and the manufacturer claims improper maintenance by the employer), loss of consortium (spouse claims they have suffered a loss due to the employees injury), dual capacity suits (employee sues the employer when injured by a product manufactured by the employer) and gross negligence claims (employer directs an employee to complete a knowingly dangerous task). Employers’ liability does not cover lawsuits resulting from discrimination, wrongful termination, harassment, etc. Employment practices liability coverage would cover these types of situations.