What can Employers Liability insurance cover?
Employers liability insurance, sometimes called employer negligence coverage, could help protect your business from lawsuits filed by employees over work-related injuries or illnesses. According to the U.S. Bureau of Labor Statistics, private industry employers reported 2.5 million nonfatal workplace injuries and illnesses in 2024. While this was the lowest rate recorded since BLS began tracking this data in 2003, that’s still millions of potential claims, any of which could escalate into a work injury or occupational illness lawsuit if an employee believes their employer’s negligence played a role.
To note: Employers liability insurance is not the same as employment liability insurance, which is often used to describe Employment Practices Liability Insurance (EPLI). While employers liability insurance helps cover lawsuits related to work-related injuries and illnesses, EPLI covers claims such as discrimination, harassment and wrongful termination.
As a workers’ compensation benefit, employers liability coverage could help provide legal defense against five main types of employee lawsuits:
1. Negligence claims
If an employee gets hurt on the job because you didn’t take adequate steps to protect them, they may file a lawsuit and sue you for damages.
Let’s say one of your cooks suffers a burn in your restaurant kitchen. Your workers’ compensation insurance policy could help cover the employee’s medical bills and lost wages.
But suppose the employee suffered a permanent injury and still sues you for negligence because they say you didn’t provide a safe kitchen. In that case, employer liability insurance could help pay for expenses related to the claim.**
2. Consequential bodily injury claims
Workplace injury doesn’t just affect the employee. It could also affect the people who care for them as well. If the spouse of an employee gets sick or hurt as a result of caring for the injured worker, they may sue you.
For example, a spouse claims they injured their back helping the injured employee out of the car for physical therapy appointments. Employers liability insurance could help pay for expenses related to the claim.
3. Third-party over action (or action over) lawsuits
If an employee sues a business because of a workplace injury, and then that company sues you, employers liability insurance may help cover the claim.
Let’s say the loader on a backhoe injures one of your employees. The employee may sue the backhoe manufacturer for damages. But then the backhoe manufacturer may sue you, claiming you didn’t properly maintain the equipment.
These lawsuits do happen. And if they do, employers liability coverage could help you cover the costs.
4. Dual capacity lawsuits
In some states, if one of your employees is injured by a piece of equipment you produce, you may be responsible for damages to the employee in two ways: First in your role as the employer, and then again in your role as the equipment manufacturer. Employers liability coverage could help protect you in your role as the equipment manufacturer from additional hefty damages.
5. Loss of consortium claims
If an employee’s family experiences a loss due to the employee’s injury or death, they may file a loss of consortium claim against you.
Compensation for these types of claims is above and beyond the disability and death benefits the family may receive from the workers’ compensation policy.
How much does Employers Liability insurance cost?
Employers liability insurance is included with ERGO NEXT’s workers’ compensation coverage.
Your exact cost for workers’ comp coverage will vary based on a number of factors, including:
- The number of employees at your business
- Your payroll
- Location of your business
- Your business operations
- The job functions of your employees
- Claims history
To get a better sense of your actual cost, check out our quick workers’ comp cost calculator or start a quote online. In about 10 minutes, you’ll have your customized quote and can purchase online and get immediate access to your certificate of insurance and 24/7 access to your policy.
Employers Liability insurance vs Workers’ Compensation: Are they the same?
Workers’ comp and employers liability insurance work together — they’re two parts of the same policy that help provide work injury liability protection for both your employees and your business.
Here’s the simplest way to think about it:
- Workers’ comp helps your employees. If someone gets hurt on the job, it could help cover their medical expenses, lost wages, rehabilitation and other related costs, regardless of who was at fault.
- Employers liability could help protect you if that same employee decides to sue your business. For example, if your employee claims that your negligence caused their injury, employers liability coverage could help cover your legal defense costs, settlements and any court judgments against you.
Most workplace injuries get resolved through workers’ comp without any lawsuit. But when a lawsuit does happen, employers liability coverage means you’re not facing those legal costs alone.
In most states, employers liability coverage is automatically included when you buy a private workers’ comp policy. In monopolistic states — where workers’ comp must be purchased through a state fund — it isn’t included, which is why businesses there often buy a separate stop-gap insurance policy to fill that gap. If you purchase workers’ compensation insurance through ERGO NEXT, it’s already part of your coverage.
