Employers Liability vs. Workers’ Comp Insurance

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What is the difference between Employers Liability vs. Workers' Compensation Insurance?

There technically isn’t any difference between workers’ compensation and employers liability insurance.

Employers liability is included whenever you purchases workers’ compensation insurance.

Most states require workers’ comp for businesses with employees because it can provide financial help if they experience a work-related injury or illness.

Employers liability is a part of workers’ comp that can protect employers from financial losses if they are accused of being at fault for causing a workplace injury or illness.

What is Employers Liability insurance?

Employers liability insurance refers to a type of coverage included with workers’ compensation insurance. It can cover lawsuits connected to work-related injuries or illnesses.

It can help protect a business financially if an employee files a lawsuit claiming the employer’s actions (or failure to act) caused their injury or illness.

What does Employers Liability insurance cover?

Employers liability coverage can help pay for:

  • Settlements
  • Damages
  • Judgments
  • Court costs
  • Legal fees

There are several types of lawsuits related to workplace injuries. The employers liability coverage in your workers’ comp insurance might help with accusations of:

Negligence: An employee may file a lawsuit for negligence and sue you for damages if they are injured on the job and claim you failed to take steps to protect them.

Consequential bodily injury: Employees may file this type of lawsuit if a family member or caregiver gets sick or hurt as a result of caring for them after a work-related injury.

Third-party over action: An injured employee may decide to sue another business (such as an equipment manufacturer) because of an injury they sustained at work. If that business decides to then sue you, it would be categorized as a third-party over action lawsuit.

Dual capacity: If the employee is injured by a piece of equipment that your business produces, they may sue you as the employer and as the equipment manufacturer.

Loss of consortium: An employee’s family member could sue you for additional compensation after a work injury or death with this type of lawsuit.

We understand these can be big, scary legal terms.

When you purchase coverage with NEXT, you’ll have access to claims advocates and specialists who can help you at every step of the process.

It’s important to get in touch with them as soon as possible after a claim of work-related injury or illness.

Who needs Employers Liability insurance?

Employers liability insurance can offer important benefits for any business with employees.

There were 2.7 million nonfatal workplace injuries and illnesses and 4,764 workplace fatalities reported by private U.S. businesses in 2020.

Without adequate insurance, a single accident could significantly impact your bottom line if you are involved in a lawsuit.

What is Workers’ Compensation insurance?

Workers’ compensation insurance provides a safety net for employers and employees when workplace injuries occur.

In addition to providing employers liability coverage, it can help with medical expenses, lost wages and other costs after a work-related injury or illness.

What does Workers’ Compensation insurance cover?

There are three main types of protection that workers’ comp typically offers:

Medical and lost wage: This part of your workers’ comp insurance helps cover bills for medical appointments and treatments, lost income and other related expenses.

Employers liability: This type of coverage can help if an employee files a lawsuit blaming the employer for their injury or illness. It can help pay for legal expenses, including settlements, damages and judgments.

Death benefits: Workers’ comp can cover some of the associated costs If an employee dies as a result of a work-related illness or injury.

Who needs Workers’ Compensation insurance?

Businesses with employees must carry workers’ comp insurance in most states.

There may be fines or felony charges applied when businesses don’t comply with local workers’ compensation laws.

Some business owners, including self-employed entrepreneurs, get workers’ comp insurance even if they’re not required to by law. It can help cover lost wages (unlike personal health insurance) and medical care if an injury occurs at work.

How much does Workers’ Compensation insurance cost?

The cost of workers’ compensation insurance can start as low as $12.20 monthly for low-risk businesses.

Monthly premiums for individual businesses are determined by factors like the type of work they do, where the business is located and how many employees they have.*

Is Employers Liability insurance the same as Workers Compensation insurance?

Employers liability coverage is a part of workers’ comp insurance policies.

Workers’ compensation offers broader coverage beyond just employers liability coverage, including lost wages, medical treatment and death benefits.

How NEXT helps small businesses find Workers’ Comp coverage

NEXT Insurance creates customized, affordable insurance packages for small business owners.

In addition to offering workers’ comp insurance that includes employers liability coverage, we also offer general liability insurance, commercial auto insurance, commercial property insurance and business owner’s policy.

You can buy your business insurance policies 100% online and get your Certificate of Insurance instantly after answering a few questions about your business.

Start your instant insurance quote today.

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Let’s find the coverage you need for your business

Business insurance is divided into different policies. We offer seven types so it's easy to design the coverage that fits your business.

General Liability insurance
General Liability

Protect yourself from accidents that cause physical injury or damaged property.

Professional Liability or Error and Omissions Insurance
Professional Liability/E&O

Shield yourself from lawsuits that claim your work errors caused financial losses.

Workers' Compensation Insurance
Workers’ Compensation

Cover medical bills and lost wages if your employees have an accident at work.

Commercial Auto Insurance
Commercial Auto

Stay on the road with coverage for dents, tows and damage to someone else’s vehicle.

Tools & Equipment Insurance
Tools & Equipment

Upgrade your general liability coverage to protect any gear that’s stolen, damaged or lost.

Commercial Property Insurance
Commercial Property

Keep your building, inventory and equipment protected from fire or water damage.

Business Owner’s Policy Insurance
Business Owner’s Policy

Combine general liability and commercial property into one policy to protect your business.

Take a look at some helpful blog posts
Why businesses need more than one business insurance policy

Why businesses need more than one business insurance policy

4 real-life examples when liability insurance can save your business

4 real-life examples when liability insurance can save your business

What every business owner should know about Workers' Comp vs. health insurance

What every business owner should know about Workers' Comp vs. health insurance

* To the extent permitted by law, applicants are individually underwritten, not all applicants may qualify. Individual rates and savings vary and are subject to change. Discounts and savings are available where state laws and regulations allow, and may vary by state. Certain discounts apply to specific coverages only.
The cost data presented here are based on minimum price, which is based on workers’ compensation insurance’s lowest monthly price for general contractor businesses operating in Texas. These data should not be considered a substitute for obtaining a quote specific to your business. These data were updated in June 2022.
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Issuance of coverage is subject to underwriting. Not available in all states. Please see the policy for full terms, conditions and exclusions. Coverage examples are for illustrative purposes only. Your policy documents govern, terms and exclusions apply. Coverage is dependent on actual facts and circumstances giving rise to a claim. Next Insurance, Inc. and/or its affiliates is an insurance agency licensed to sell certain insurance products and may receive compensation from insurance companies for such sales. Policy obligations are the sole responsibility of the issuing insurance company. Refer to Legal Notices section for additional information.