When people think about workers compensation coverage, they often overlook the Employer’s Liability section. My pap would have called it the redheaded stepchild of the policy.
But employer’s liability insurance is important. It covers the employer if the employee wants more than just lost wages and medical bills paid.
How about an example?
Let’s say you own an accounting firm. One day, one of your bookkeepers is involved in a nasty stapler accident and loses their left arm. (Fortunately they are a righty, so not all hope is lost!) There is an intrinsic value to having an arm. Workers comp will pay for lost wages and medical bills. But they will want compensated for their missing arm.
The employer’s liability will pay for that missing arm.
This is America, Land of the Lawsuit!
You can’t cut your grass because of a work injury, so you have to hire a lawn service. Employer’s liability could pay for that service.
A new grandmother injures her back at work. Now she can’t lift her grandkids. Again, employer’s liability would compensate her for that loss.
Or imagine a young husband who could no longer …. consummate. You better believe he’s going to want some cash.
Coverage Limits
There are 3 coverages provided by employer’s liability.
- Accident – each incident– this limit is the maximum amount of coverage provided for any one accident regardless of the number of employees.
- Disease – policy limit – this is the aggregate limit that your policy will pay out for any one disease contracted by employees in the course of employment.
- Disease – each employee– this is the maximum that your policy will pay to any one employee for a disease.
The Good News
In PA, workers comp policies come with some employer’s liability coverage built in. Basic policies include $100,000 of coverage. I strongly encourage anyone buying a workers compensation policy to consider higher limits.
It’s usually only a few dollars to bump those limits up to $1,000,000 a piece. Of course you don’t want to use this coverage. But this is one of the best ways to get the most bang for your insurance buck.
To sum it up..
Workers compensation provides lost wages and pays the medical bills of your injured employee. Employer’s liability pays for damages that workers comp doesn’t pay. So do yourself a favor and talk to your agent or broker about increasing your liability limits today.
Don’t have a worker’s comp policy? Call us today, we can help!
