Employers Liability Insurance - the Second Part of your Worker's Compensation Policy
Have you reviewed this critical coverage to ensure there are no gaps in coverage that can leave you at risk?
Your work comp policy is designed to be the sole exclusive remedy for work related injuries.
Workers Compensation is a system of benefits provided by law to most workers who have job-related injuries or diseases. These benefits are paid regardless of fault, and are determined by each state's own workers’ compensation law or statute.
Illinois law provides the following benefits which are covered under Part One of the Policy:
Medical care that is reasonably required to cure or relieve the employee of the effects of the injury;
Temporary total disability (TTD) benefits while the employee is off work, recovering from the injury;
Temporary partial disability (TPD) benefits while the employee is recovering from the injury but working on light duty;
Vocational rehabilitation/Maintenance benefits are provided to an injured worker who is participating in an approved vocational rehabilitation program;
Permanent partial disability (PPD) benefits for an employee who sustains a permanent disability or disfigurement, but can work;
Permanent total disability (PTD) benefits for an employee who is rendered permanently unable to work;
Death benefits for surviving family members.
The idea behind this no fault coverage is to reduce litigation between injured employees and employers.
By providing the state statute benefits listed above, the employer cannot be sued by an injured employee for negligence surrounding a work related injury.
However, litigation still arises when extreme gross negligence is alleged or 3rd party over action suits are filed.
For example, a spouse or family member of an injured or deceased employee may file suit alleging gross negligence on the part of the employer.
Or, an employee injured by a malfunctioning piece of equipment may litigate against an equipment manufacturer, who in turn files counter suit against the employer for improper use of the equipment.
Both of these types of litigation would not be covered on the employers General Liability Insurance, since work related incidents to an employee are EXCLUDED on a General Liability Policy.
Remember - Workers' Comp is meant to be the sole exclusive remedy for work related injuries.
In steps Part Two of your Work Comp Policy - Employers Liability Insurance.
In addition to the cost to defend against such litigation, coverage includes all sums you legally must pay as damages because of bodily injury to your employees:
for which you are liable to a third party by reason of a claim or suit against you by that third party to recover the damages claimed against such third party as a result of injury to your employee;
for care and loss of services; and
for consequential bodily injury (pain and suffering) to a spouse, child, parent, brother or sister of the injured employee.
Basic Limits of Employers Liability Insurance are
Bodily Injury by Accident: $100,000 Each Accident
Bodily Injury by Disease: $500,000 Policy Limit
Bodily Injury by Disease: $100,000 Each Employee
Is this a coverage gap in your business? Could your litigation defense costs and damages exceed $100,000?
Does your commercial umbrella insurance require higher underlying limits?
For the nominal additional cost, we recommend raising these basic limits to $1,000,000 / $1,000,000 / $1,000,000.