Employers Liability Insurance vs. Workers Compensation

Workers compensation insurance is a commercial insurance policy that covers the legal liability towards employees. It covers employee compensation in case of an accidental injury, illness or death at the workplace.

Workers compensation is also called employee compensation insurance, or workmen insurance. A workmen compensation insurance policy covers the cost of medical bills of employees that are caused or aggravated due to employment conditions.

For example, if an employee gets injured during working hours while operating machinery, then the workmen compensation policy will cover the medical bills for the employee.

Employers’ liability insurance is also a type of commercial insurance that provides financial protection to employers. However, this typically comes into the picture in case an employee files a lawsuit against them for any work-related injury or illness. Employers liability policy also covers the legal cost arising from the employee’s lawsuit along with aunty third-party claims.

If an employee feels that the workmen compensation cover was not enough to cover all the medical bills. They can sue the employee for having poor quality machinery or any hazardous condition of the shop floor for which they have suffered the injury or illness.

The legal expenses incurred by the employer are covered under the employer's liability insurance.

Employers' liability insurance and workers compensation are both important aspects of commercial insurance, as they provide financial protection to employers against liabilities related to workplace injuries or illness.

Small and medium enterprises that want to stay compliant with the employer’s liability law must opt for workers compensation insurance under the SME insurance policy umbrella.

Let us explore the differences between these two kinds of insurance policies.

Understanding the distinct roles of employers' liability insurance and employee compensation insurance is necessary for businesses. Employers can create a robust financial safety net for their employees as well as the enterprise.

Workers compensation insurance provides prompt medical care and financial support in case of an injury to the employee. Employer liability provides a financial shield against lawsuits alleging negligence of the employer at the workplace. It protects the business or employer from any unexpected costs.

Remember, the best course of action is to ensure workplace safety. However, accidents are a reality. By having both employers' liability insurance and workmen compensation policy in place, you can ensure that your employees receive the care they deserve while safeguarding your company's financial future.

Don’t wait for the accident to occur. Check out the Tata AIG SME insurance policies today!

What is employers’ liability insurance policy?

An employers’ liability insurance policy is a type of commercial insurance designed to protect businesses from financial losses that can arise from lawsuits filed by employees alleging negligence that led to injury or illness at the workplace.

What is the employer's liability for compensation?

Under employer’s liability compensation, an employer is liable for paying compensation to an employee if they suffered personal injury at the workplace during their employment. It also covers occupational diseases caused to the employee due to their exposure to a certain workplace environment.

What is employer liability in Labour law?

Employer’s liability in labour law is the legal obligation of an employer which makes it mandatory for employers to provide a safe working environment to their employees and also compensate them for any injuries or illness caused at the workplace.