Employers’ liability insurance

“Safety first” isn’t just a motto, it’s a fact of life for any reputable business. But accidents can happen. And if they happen in your workplace, those injuries or illnesses might expose you to liabilities that can result in crippling legal and medical expenses. That’s where employers’ liability insurance comes in.

What is employers’ liability insurance?

Employers’ liability (EL) insurance protects employers, whether they have worker’s compensation coverage or not, from lawsuits involving injuries, illnesses or death sustained in the workplace. More importantly, EL is not a no-fault coverage, which means the claimant must prove the employer was both negligent and responsible for their injury in order for a claim to be paid.

Who needs employers’ liability insurance?

Simply put, any employer in any industry with any number of employees is susceptible to litigation based on injuries, illnesses or death occurring in the workplace. Which means employers of all stripes can benefit tremendously from having employers’ liability insurance. This includes, but is certainly not limited to, the following industries:

  • Retail
  • Financial services
  • Manufacturing
  • Travel & Tourism
  • Information Technology
  • Automotive
  • Agriculture
  • Arts & Culture
  • Mining
  • Forestry
  • Life Sciences
  • Health & Medicine

Keep in mind that employers’ liability insurance is purchased as part of a commercial general liability (CGL) policy and keeps you covered even if your employees are not required to be insured under a worker’s compensation plan. Without a firm EL policy in place, you may leave yourself vulnerable to potentially devastating costs.

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How much does employers’ liability insurance cost?

There are a wide variety of costs that can be incurred due to work-related injury, illness or death. The most common ones are as follows:

  • Lost wages
  • Lost future earnings
  • Medical expenses
  • Legal fees
  • Legal awards and settlements

You don’t have to be a mathematician to realize that any or all of the above can prove disastrous to your business. That’s why having employers’ liability insurance is a crucial investment for any employer.

What are my risks of an employers’ liability claim?

A recent report on work fatality and injury rates in Canada crunched the numbers and delivered these hair-raising results concerning Ontario-based workplaces in 2018:

  • 64, 855 lost-time injuries
  • 74 injury-related fatalities
  • 260 occupational disease-related deaths

What this tells us in no uncertain terms is that injuries, illnesses, and even deaths can and will occur in the workplace regardless of best intentions, preventative measures, and constantly evolving policies focused on increasing safety in the workplace.

At Mitch, our brokers are committed to helping you protect your business from unforeseen circumstances and ensuring you continue to thrive in your respective industry. Get in touch with us today and learn how you and your business can stay safe.

Frequently asked questions

Is employers' liability insurance the same as workers compensation?

No. EL is a separate liability, providing coverage that does not fall under workers compensation insurance. Even if you pay for worker’s compensation, you are still not immune from litigation regarding injuries, illness or death that might occur in your workplace. This makes having employers’ liability insurance all the more imperative.

Is employers' liability the same as professional indemnity?

No. employers’ liability insurance is concerned with injury, illness or death sustained in the workplace. Professional Indemnity insurance, on the other hand, covers claims where a business is alleged to have provided negligent advice or service to a client (i.e. consulting, accounting, medical services, etc.).

What is Contingent employers' liability?

EL provides coverage for work-related injuries, illnesses or death sustained by employees who are not required to be insured under a worker’s compensation plan.

Meanwhile, Contingent Employers’ Liability (CEL) deals with those workers who are required to be insured under a worker’s compensation plan. It is typically regarded as a supplement to commercial general liability insurance (CGL) and provides insurance in the case of work-related injuries, illnesses or death when worker’s compensation does not apply.

For example: An Ontario employee is injured while working in another province for a longer amount of time than the worker’s compensation out-of-province time extension permits.

How much does employers' liability insurance cost?

The total amount of coverage an employer might need can vary wildly as it depends on several factors, including type of business, total number of employees, and previous claims history.

While some insurers might suggest a minimum coverage limit, others may very well offer considerably higher amounts of coverage. The best step you can take as an employer is to discuss your specific situation and needs with an experienced insurance broker and come to an informed decision that serves you best.

Does employers' liability insurance cover directors?

No. Directors who are interested in protecting themselves from liability can do so by being covered under Directors’ and Officers’ Liability insurance (D&O).

D&O protects directors and officers from liability claims related to their actions as directors or officers. Directors’ and Officers’ personal liability for wrongful acts (alleged or otherwise) has increased substantially in recent years, whether the corporation they’re a part of is public, private or non-profit. This particular type of insurance is the Directors’ or Officers’ best opportunity to protect themselves from risk.