Employer's Liability Insurance Cost

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Employer’s liability insurance is an important policy for every company. As a business owner, you know the importance of your workforce. With their expertise and knowledge, your employees are often your most valuable assets. That’s why you want to make sure they are protected in case they are harmed, injured, or get sick while doing their work. Workers’ compensation insurance is there to pay for their medical expenses. But that coverage may not provide enough protection for your business in case an employee decides to file a claim. There are a number of exceptions in most workers’ compensation policies. Employer’s liability insurance is a stopgap coverage to cover those exclusions.

In this guide, we have gathered the key information you need to know about employer’s liability insurance cost to help you with your search for the right policy.

We Cover in This Guide

  • How much does employer’s liability insurance cost?

  • What is employer’s liability insurance?

  • What does employer’s liability insurance cover/not cover?

  • Benefits and risks

  • Tips for buying

  • Types of insurance you may need

  • FAQ

  • Summary

How Much Does Employer’s Liability Insurance Cost?

Employer’s liability insurance costs range from $170 to $250 per month depending on your provider, coverage, limits, location, payroll, industry, risks, and claims history. The most significant factors that determine the price of your policy are your number of employees and the risks of their work. Reduced salaries, a safe work environment, and a low history of workers’ compensation claims are the best ways to save money on your policy.

What is Employer’s Liability Insurance?

Employer’s liability insurance is a policy designed to provide full protection for your business against injury and illness claims that employees may file against you. While many workers’ compensation insurance policies include a certain amount of coverage, there are exceptions that could require you to pay out of pocket. Additionally, certain states force businesses to have separate policies to cover employee medical costs and protection if an employee decides to sue your company. If your business requires employees to work in various states, or even overseas, having a supplemental employer’s liability insurance policy is crucial and may even be mandatory.

What Does Employer’s Liability Insurance Cover/Not Cover?

Employer’s liability insurance covers those scenarios that are not included under most workers’ compensation policies. The following are some examples:

  • Third-party counter suits: If your employee gets injured while operating a piece of equipment, they may decide to sue the manufacturer instead of your company. But that manufacturer may turn around and file a lawsuit against your company claiming that your actions were responsible for the injury. Simply having workers’ compensation coverage will not cover the legal costs and damages from such a lawsuit; you need employer’s liability insurance.

  • Loss of consortium: The impact of an employee getting sick or injured goes beyond that individual. Their spouse or children may be harmed by the loss of income or injury and may decide to sue your company.

  • Dual capacity lawsuits: If your employees use your own products while on the job, injury lawsuits could result in them suing you as both an employer and a manufacturer. Most workers’ compensation coverage cannot handle these complicated claims, but employer’s liability insurance can.

  • Frivolous and false claims: This coverage protects you in case an employee makes up an injury, or falsely blames your company for an ailment that occurred outside of their work.

There are certain potential claims that are not covered under these policies, including:

  • Injuries and illness that occur outside of employment

  • Injuries as a result of an employee’s own actions

  • Negligence

  • Injuries and illness that occur because an employee violates your company’s safety policies

  • Permanent and stationary injury and disabilities

Benefits and Risks

In addition to the protection employer’s liability insurance provides, there are countless other benefits. These include:

  • Depending on your location and how your business operates, you may be required to have a certain amount of coverage. Purchasing this insurance will allow you to legally operate your business.

  • Lawsuits are expensive and time-consuming. They can be disastrous for a company, and that’s even if you win. Paying for damages if you lose can wipe out your earnings and ruin your business. Employer’s liability insurance covers all legal costs.

  • Knowing that your business is covered in case something goes wrong allows you to focus on your work without being overly concerned with what could happen.

Tips for Buying

The regulations for employer’s liability insurance can be complicated and difficult to navigate. When considering employer’s liability insurance cost, consider the following suggestions.

You should work with an independent agent. An independent insurance agent with expertise in your industry will ensure that you have the proper coverage for your potential risks and comply with the regulations of the state(s) in which you operate. Additionally, they can help direct you toward the providers who can best serve your needs at the best price. They can also look into potential discounts you could get for combining this coverage with your workers’ compensation insurance.

Types of Insurance You May Need

  • General Liability Insurance: Covers third-party bodily injuries, property damage, and other related claims that occur during your operations.

  • Commercial Property Insurance: Covers damage, breakdown, and theft of business property, assets, and equipment from covered scenarios.

  • Workers’ Compensation Insurance: To be combined with employer’s liability insurance. Pays for medical expenses, rehab, and lost wages for employees who get sick or injured while on-the-job.

  • Production Liability Insurance: Covers potential liabilities caused by the product you manufacture.

FAQ

- Regarding employer’s liability insurance, what does it mean to be a “monopolistic state”?

That refers to states that do not allow employer’s liability coverage to be included in workers’ compensation policies. North Dakota, Ohio, Washington, and Wyoming require companies to purchase workers’ compensation from a state fund and therefore employer’s liability coverage must be acquired separately.

- What is Employment Practices and Liability Insurance (EPLI)?

It is a coverage that protects your company against claims of employment-related issues like discrimination, sexual harassment, wrongful termination, and failure to promote.

- What is workers’ compensation insurance loss cost?

It’s a way for insurance companies to determine rates. It refers to the number of medical losses for each claim.

Summary

Employer’s liability insurance is an essential coverage for your business. Despite your best efforts to protect your employees, accidents happen, and you need to be protected in case they decide to sue. After reading this, you should feel adequately informed about employer’s liability insurance cost, and confident that whatever policy you choose will meet your needs.

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