What Is The Difference Between Workers’ Comp And Employer’s Liability?

What Is The Difference Between Workers’ Comp And Employer’s Liability?

Workers’ compensation and employer’s liability insurance are usually purchased together under a company’s overall business insurance policy. To understand the difference between workers’ comp and employer’s liability, let’s review what each plan covers. 

Employers Liability vs Workers’ Comp: An Overview

What Is Workers’ Compensation?

Workers’ compensation provides coverage for employees who are injured while working without regard to fault. It is a state-mandated program and a form of no-fault insurance. While the employee must show that they were hurt while performing the duties of his or her job, they do not have to prove that the employer was negligent. 

Workers’ comp will cover the costs of medical expenses such as treatments and medication, as well as partial wage loss. It does not cover any costs associated with pain and suffering.

What Is Employer’s Liability?

Employer’s liability provides coverage for an employer in situations where an employee feels that the workers’ comp provided was not adequate to cover the cost of medical bills or lost wages. It is applicable in situations in which the employer was negligent.

In these lawsuit driven situations, the employee must still show that his or her injury took place while doing their job. However, they must also prove that it would not have happened if it weren’t for negligence on the part of the employer. 

Common Employer Liability Scenarios

Employer’s liability insurance covers all kinds of employer’s liability claims unless the policy specifically excludes them. Four of the most common lawsuits involve the following:

1. Third party cases: In these cases, another party was held liable for the employee’s injury and in turn, they are filing a lawsuit against the employer. An example is if you own a construction business and an employee was hurt using a machine that was not serviced regularly. The employee sues the manufacturer of the machine, who then sues the employer for contributory negligence.
2. Loss of consortium: An injured employee’s spouse files this type of lawsuit. These damages typically fall into one of three categories – damages for loss of services, damages for loss of support, and damages for loss of quality in the marital relationship, which includes acts like providing affection or emotional support. 
3. Dual-capacity suits: An employee can file this lawsuit when a product their employer makes is the cause of their injury. This means the company is liable both as an employer and a manufacturer. 
4. Consequential bodily injury: If the employee’s family members suffered bodily injury themselves as a result of the workplace injury, they could sue the business. For example, if an employee was injured using a machine and their spouse suffered an aneurysm from stress, the employer may be sued for those damages, as well. 

When these claims arise, employer’s liability insurance can cover a company’s legal defense fees, settlements, damages and judgments, and other court costs. 

How To Prove An Employee Liability Claim 

To prove a claim, an employee must show that the employer was negligent in some way. Proof of negligence requires: 

• The employer had a duty to protect their workers’ from harm
• Actions or lack of actions breached that duty 
• An injury occurred as a direct result of an employer’s breach of duty
• The employee suffered tangible harm as a result of the injury

Types of Workers’ Compensation Claims

To better understand employers liability insurance vs. workers’ compensation, it can be helpful to familiarize yourself with the four most common types of workers’ compensation claims. There is typically no need for litigation if your injury entitles you to workers’ compensation. As a result, these scenarios tend to be more straightforward. 

1. Medical Treatment: In some cases, you may sustain a workplace injury that requires treatment but does not necessitate taking time off from work. Your worker’s compensation will cover only the cost of medical treatment. You can return to work at your full rate of pay following treatment or upon recovery. 
2. Medical Treatment and Lost Time: In other cases, you may sustain a workplace injury that requires both medical treatment and time off from work for recovery. In such cases, your workers’ compensation will cover treatment, plus 2/3rds of your average weekly wages. While you may return to work upon recovery, a long absence can result in termination. 
3. Medical Treatment and Inability to Return to Pre-Injury Work: If your workplace injury is severe, it may prevent you from physically resuming your pre-injury role. In this instance, workers’ compensation covers initial treatment and 2/3rds of your average weekly wages. There is a ceiling on these benefits, however. It is typically up to 400 weeks unless the injured party is formally released to light work duty. 
4. Medical Treatment and Inability to Return to Any Work: After receiving medical treatment, you may be unable to return to any type of readily available work. As a rule, these are severe, often disabling injuries. 
   They may include: 
   a. Loss of limb
   b. Paralysis
   c. Major organ damage 
   d. Sensory disability (blindness, Deafness, etc) 
   e. Severe burns 

In these instances, most individuals are entitled to workers’ compensation benefits for life. There may or may not be adjustments as the individual’s abilities shift over time.  

Be aware that in most states, it is legal for employers to terminate your employment if you were injured on the job. This is more likely if the injury was the result of personal negligence. In most cases, you will continue to receive workers’ compensation benefits after termination.

Furthermore, you can file for workers’ compensation after quitting your job if you can prove that you sustained your injuries while employed. 

Contesting a Workers’ Compensation Decision: Appeals 

If you disagree with a judge’s decision in regard to workers’ compensation benefits, you have up to 30 days to appeal. You may wish to appeal if you file for workers’ compensation and are denied. If the reasons for the denial are incorrect, an appeal can ensure you receive the compensation you deserve. 

Appealing a decision can be a complex process that may involve considerable legal paperwork. You may also need to formally serve papers to the other parties involved in the appeal. 

If you are initially unsuccessful, you may need to appeal up to three times. Each successive appeal will become more formal and complex. Thus, it is always wise to hire a lawyer to help you navigate the appeals process. 

Consult A Workers’ Compensation Lawyer 

Navigating employers liability vs. workers’ compensation on your own can be challenging. If you have been involved in a workplace accident, consult with a workers’ compensation attorney to stand by your side throughout the process. He or she can help you determine if the expenses of your claims warrant a lawsuit under the employer’s liability coverage.