what employers liability insurance covers
other sorts of claims covered by employers liability insurance include many companies choose to carry employers liability insurance to help cover the costs of defending the organization in court claims can become complicated and costly for employers particularly in the case of a lawsuit a liability claim may be legitimate or not but even so many businesses cannot accept that level of risk and they take measures to insure against it their liability coverage applies to both court awarded sums and to payments reached in out of court settlements 3in the event of a payout under an employers liability insurance policy an employer can help limit their losses by including as a condition of the payout a clause that releases the employer and their insurance company from further liability that is responsibility related to the incident in question employers liability insurance policies tend to place limits on payouts per employee per injury and overall these limits might be as low as 100 000 per worker 100 000 per incident and 500 000 per policy 5 employers liability insurance only applies to full or part time employees it does not cover independent contractors or employees working outside of the u s or canada 6employers liability insurance limitsemployers liability insurance coverage does not cover every situation exclusions include criminal acts fraud illegal profit or advantage purposeful violation of the law and claims arising out of downsizing layoffs workforce restructurings plant closures strikes mergers or acquisitions if an employer intentionally aggravates an employee s work related injury or illness employers liability insurance will not cover the employers financial obligations to the employee and the employer will have to pay if the employee wins in court also many states do not allow insurers coverage to apply to punitive damages however many employers liability insurance policies do manage to cover these costs through a most favored jurisdiction clause the clause specifies that the policy s coverage will be regulated by the state law that does allow employers liability insurance to provide compensation for punitive damages a jurisdiction that favors them in other words 7take for example a company that has offices and work sites all around the u s a claim arises in a state where punitive damages are excluded from employers liability insurance if the company is established in a state that does allow punitive damages coverage then the company employers liability insurance policy can protect it after all it s important to note that employers liability insurance and workers compensation do not cover employers against employee claims alleging discrimination for example based on sex race age or disability wrongful termination harassment slander libel and other employment related issues such as failure to promote the employer would need to purchase a separate type of policy called employment practices liability insurance epli for this kind of coverage 8