What is an employer's liability coverage designed to address?

Employer's liability coverage is designed to protect employers against claims made by employees that arise out of injuries sustained during the course of their employment. This coverage addresses situations where employees may seek compensation through legal action due to workplace injuries that are not covered by workers’ compensation statutes.

This type of insurance goes beyond the mandatory workers' compensation coverage, which provides necessary medical and wage benefits as dictated by law. While statutory benefits cover the essential needs of injured workers, employer's liability coverage comes into play when an employee alleges negligence or lacks of safe working conditions from the employer's side.

For instance, if an employee suffers an injury they believe resulted from an unsafe work environment, they may choose to file a lawsuit against the employer alleging negligence. In this case, employer's liability coverage would provide legal defense and potential settlement or judgment costs, ensuring that the employer is financially protected against claims that exceed what is covered under typical workers' compensation laws.