Employee Liability Insurance Claims

Employee liability insurance is essential for business owners. It protects them from injury and property damage claims caused by their employees’ negligence. To understand why employers are liable for damage their employees cause requires a brief introduction to employer-employee law.

For almost a hundred years, every first-year law student has had to take a course in torts. Torts deal with the legal responsibility, or liability, one person has for the injuries or property damage he causes to another person. The same theory of torts extends to the responsibility a business owner has for the injuries or property damage one of her employees causes.

This is known as the theory of respondeat superior, a Latin term roughly translated as “let the supervisor answer” for his employees’ actions. It’s also referred to as vicarious liability, when an employer becomes vicariously (not directly) or concurrently (at the same time) liable for an employee’s actions.

Liability for Employee Actions

In most cases, if you suffer injuries through an employee’s actions, the employer is liable for your damages. Damages often include medical and therapy bills, out-of-pocket expenses like medicines, crutches, etc., lost wages, and pain and suffering.

Generally, an employer is liable when:

  • An employee injures a customer or contractor
  • An employee causes property damage

For an employer to be liable, the employee must have acted within the definition of his duties. This means the employee must be performing his normal job duties when he causes the injuries or property damage.

As in other types of liability, employers owe a legal duty of care, a responsibility, to their business customers. They must do everything reasonable and practical to protect their customers from undue harm – particularly any harm which is foreseeable for the type of business they operate. This includes making sure employees do everything reasonably possible, within their scope of employment, to protect customers from injuries.

When the employer, either on his own or through an employee acting within the scope of his duties, causes or permits a customer to suffer an injury, the law says the employer breached his legal duty of care (violated his legal responsibility). The employer then becomes liable for the injured customer’s damages.

Elements of Injury Claims

If an employee injures you, and you’re considering filing an employee liability insurance claim, you must be able to prove several elements before your claim will succeed.

  1. Duty of care. Proving duty of care may be the easiest. If a business invites people in for any reason in any number of ways, the employer’s duty of care simply means she has an obligation to ensure her business operates safely. She must also guarantee her employees act in a manner that is not dangerous to customers.
  2. Foreseeability. Proving foreseeability means your injury must be one that’s reasonable to know about in a similar type of business. In other words, it could be expected.
  3. Scope of duty. The employee must have injured you while performing his job the way his employer intended him to do it. This is the most controversial part of a personal injury claim for an employee-caused injury. There are innumerable cases of disputed scope of duty lawsuits.
  4. Breach of duty of care. To prove breach of duty of care, you must show your injuries were foreseeable by the employer or her employee, and the employer or employee still permitted or caused your injury. The law calls the action that caused the breach of duty of care the negligent act.
  5. Damages. To prove damages means to show your medical bills, out-of-pocket expenses, lost wages, and pain and suffering directly link to the employer’s breach of his duty of care. The link is referred to as the direct and proximate (legally acceptable) cause of your injuries.

Gathering Evidence

Proving the elements of your personal injury or property damage claim requires evidence. You won’t get a fair settlement offer without solid evidence to back-up your claim. If you’re injured by an employee, there are several actions you should take…

Contact the business manager or owner

If an employee injures you, don’t sit back and take it. Vowing you’re never going to come back to the store won’t pay your medical bills. The sooner you contact the manager and tell her what happened, the better. Once you leave, it’s very difficult to come back later to file an injury claim.

Ask the manager to write an incident report. If the store is a chain, the manager must fill out some form of report for the company. Unfortunately, you don’t have a right to a copy if the manager won’t give you one. The important thing is he will turn it over to corporate headquarters, so there will be a confirmation of the accident.

For example, if you’re in a restaurant and the waiter spills hot coffee on your lap, don’t say, “It’s all right” because you feel sorry for the waiter. If you leave, and hours later you’re writhing in pain from where the coffee scalded you, it’s probably too late to go back and complain. The manager could easily say you burned yourself somewhere else after you left the restaurant. At that point, your claim for damages may be doomed.

Look for witnesses

Witnesses, especially independent, non-family or friend witnesses, are crucial in establishing your injury claim.

Let’s say for example, you were delivering medical supplies to a local hospital. You drove to the service area and unloaded the supplies. While waiting for the supervisor to sign off on the delivery, a forklift operator working for the hospital dropped some of his load on top of you, cutting your face and arms. There were at least five other employees who saw the operator drop part of his load on you.

Ask the witnesses if they would write down what they saw and sign it, even if it’s on the back of your loading document. Their statements don’t have to be notarized or sworn to. That only comes into play if someone were to later question the authenticity of a signature.

The employees’ written statements are powerful evidence. They’re from eyewitnesses who work for the same company as the forklift operator. The law refers to those statements as admissions against interest. In other words, they’re admitting something that isn’t good for them.

Take photographs, video and audio

Use that cell phone! Today, almost all cell phones have some sort of camera, video and audio recording functions. Remember, for employee liability claims you must prove the employee was acting within the scope of his duty.

Using our previous example, you’d want to photograph or video the area where you were standing when the forklift load fell on you. Photograph the loader itself and if possible, the employee who accidentally dropped it on you. Be sure to photograph the accident in context with its surrounding area.

You can never take too many photographs or too much video. Use the audio recording function to interview witnesses, including employees who witnessed the accident. In addition to written statements, audio recordings will help make your insurance claim even more credible. If you can get the operator of the loader to admit he accidentally dumped part of his load on you, your case will be just about airtight.

Verify your damages

If a local emergency room or clinic treated you, get copies of your admitting chart and the doctor’s diagnosis and prognosis. The diagnosis makes clear the type of injury you received, while the prognosis details the type and extent of treatment you’ll need during your recovery.

You also need your medical bills and receipts for out-of-pocket expenses like medicines, crutches, etc. If you had to miss work while recovering, have your boss write a letter on company letterhead stating the amount of your lost wages. Make sure a supervisor signs it.

Filing Your Insurance Claim

As soon as possible after your injury, contact the company’s insurance provider. If the manager or business owner refuses to give the insurance information and the business is part of a chain, you can go online and look up the company’s corporate office.

Call those people and report your injury. Ask someone at the main office to put you in touch with the insurance company or someone who handles employee liability insurance claims. Report your injury and say you want to file a claim.

Within a week or so, you’ll receive a call from the company’s insurance representative or a claims adjuster. Ask for the claim number. You’ll continue to use it as a reference during your correspondence.

Settlement negotiations will likely not occur until later, once you’ve completed your medical treatment and therapy. If the adjuster decides the employee didn’t injure you or acted outside the scope of his employment, he may deny your claim immediately.

Tell the claims adjuster you have convincing evidence including photographs, video, and audio recordings as well as witness statements. Send her copies of everything. You’ll need all the evidentiary firepower you can get to succeed.

Don’t expect the adjuster to admit at any time that she accepts liability on behalf of the employee or company. That just doesn’t happen. Instead, the adjuster will review your evidence and investigate the accident.

At some point the adjuster will mail you a release for medical records. The release is a document authorizing her to access your medical treatment history to determine the type and nature of your injuries. Make sure the release is strictly limited to information concerning your current injury. If unlimited, the adjuster could access your entire medical history. She would try to find and link previous injuries to your current injury, lessening your settlement.

If you’re still recovering from the injury and must continue to see your doctor or therapist, the adjuster won’t discuss a settlement. She’ll wait until she has all of your medical bills, out-of-pocket expenses, and the entire amount of your lost wages.

Negotiations

Settlement negotiations begin when you complete your treatment and all the evidence of your damages is in the adjuster’s hands.

Depending on the seriousness of your injuries, the claims adjuster will likely offer you anywhere from 1 – 3x the total of your medical bills. The insurance company does this to include all your damages, plus an amount for pain and suffering.

At that point, you can accept the offer or argue for a higher settlement. Tell the claims adjuster how much the injury affected you. Explain how many sleepless nights you had and your continuing pain. Relate all the hardship you’ve gone through due to the employee’s negligence.

With insurance settlements, negotiations are never complete until you’re satisfied, or until the claims adjuster says, “This is our final offer.” Once she says the word final, she means it. Adjusters rarely use that word unless it really is their final offer.

When do you need an attorney?

If your injuries are the soft tissue type, including sprains, minor cuts and bruises, and similar injuries, you can probably handle your own claim. However, if your injuries are the more severe hard injuries such as broken bones, a head injury, scarring, or second or third-degree burns, you should meet with a personal injury attorney.

To get a higher settlement amount requires the expertise and vigorous legal representation of an experienced personal injury attorney.

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