Employers liability insurance protects employers when they have to tackle legal liability claims. Usually these claims arise when an employee sustains injury or illness due to an employer’s negligence. It may be an injury due to an accident that may have occurred because of faulty workplace conditions that could have been better controlled or managed.
In most countries, employers liability insurance is mandatory. In countries where this form of insurance is not mandatory, there are instances of small companies becoming bankrupt when claims are filed against them. Injuries that occur due to motor accidents may be an exception to this because it can be covered separately under a motor insurance policy.
Who Requires Employers’ Liability Insurance Cover?
Any businessman or professional who has employed staff should consider opting for employers liability insurance. Businesses that avail the services of trainees, temporary workers or sub-contractors are also included under employers’ liability insurance. It is also compulsory in case of limited companies.
When Can an Employee File a Liability Claim against an Employer?
Here are some situations when an employee has the right to file a liability claim against the employer:
Discrepancy in the calculation of wages
Miscalculation in the number of working hours
Occurrence of any work related accident that results in injury or death
Disease or illness due to fault in work practices
What is Workmen Compensation Insurance?
Workmen compensation insurance policy is a part of the general liability insurance. The purpose of the policy is to ensure that the injured employee does not suffer total income loss. Under this policy, employees are protected against any injuries they face at the workplace.
In some instances, the damages may be paid to the family of the injured if the latter becomes incapacitated. Workmen’s compensation may also cover injuries that occur during official work performed outside the workplace.
Take a simple example of an accident that occurs during the delivery of goods. In Workmen compensation insurance policy, the premium depends to a great extent on the company’s services. The insurance may also cover vocational rehabilitation. In certain cases, the employer is liable to pay out two-thirds of the salary to the injured employee. This may continue till the employee is ready to resume work.