Personal Injury at Work: When to File an Employer Liability Insurance Claim

Before filing your claim, learn the difference between Employer Liability Insurance and Workers’ Comp Insurance to get the most compensation for your work-related injury.

Most employers are required by state law to provide some form of Workers’ Compensation insurance to their employees.

In addition to Workers’ Compensation, most companies also purchase Employer Liability insurance and Employer Practices Liability insurance.

If you’re suffering from a personal injury arising from your work, you’ll need to understand the pros and cons of each type of insurance before filing your claim.

Workers’ Compensation Coverage Basics

Workers’ compensation is a form of no-fault insurance. The advantage of workers’ comp insurance to the employee injured at work is not having to prove their employer was at fault.

So long as the injury or illness happens on the job, the employee is eligible for workers’ compensation benefits, even if the worker was at fault for the accident.

Workers’ Comp Benefits are Immediately Available

Workers’ compensation medical benefits are effective immediately after the worker is injured. Wage replacement benefits typically kick in after a week or two.

Workers’ comp provides coverage for medical and therapeutic services, medications, transportation to and from treatment, and partial wage loss.

Wage replacement benefits are usually two-thirds of an injured worker’s base pay, up to a certain limit. Since workers’ comp wage benefits are not subject to federal taxes, some workers will see wage benefits close to their normal take-home pay.

Workers’ Compensation is Limited

Unfortunately, because of state-mandated limits on workers’ comp replacement wages, employees who are higher wage earners may face a significant cut in pay after a personal injury at work.

Permanently injured employees, especially those at higher pre-injury wages, may not get a worker’s comp settlement that adequately replaces the future income the worker would have earned if not for the work injury.

Workers’ compensation won’t pay anything for pain and suffering, or for consortium claims made by the dead or disabled worker’s spouse.

Most importantly, employees who file a workers’ compensation claim usually can’t file a lawsuit or other injury claim against their employer in connection with same the injury or illness.

How is Employer Liability Insurance Different?

While workers’ comp insurance covers medical treatment and partial wage benefits for injured employees, employer liability insurance protects employers from claims or lawsuits brought by injured employees and, in some cases, their spouses.

Most states allow employers to buy workers’ compensation insurance privately. The exceptions are Ohio, North Dakota, Wyoming, Washington, the U.S. Virgin Islands, and Puerto Rico. In these monopolistic states and territories, employers are required to buy coverage from one of the state’s insurance pools.

Just like you might bundle your home and auto insurance with the same company to get a better rate, employers typically buy workers’ compensation insurance together with employer liability insurance.

In monopolistic states, the workers’ compensation plans don’t include liability insurance.  Employers in those states usually purchase a general liability policy with an employer liability addendum.

Workers Can Seek Full Compensation in Employer Liability Claims

There are no limits to the type or amount of compensation a severely injured worker can seek from the employer’s liability insurance company.

Your employer liability claim can seek compensation for all your injury damages, including medical and therapeutic services, medications, transportation to and from treatment, full wage replacement, and a monetary award for pain and suffering.

Depending on the at-fault company and the severity of the worker’s injuries, some employer liability cases settle for hundreds of thousands, even into millions of dollars.

Employer Liability Claims are Complicated

Employer liability claims are more complex than workers’ compensation claims.

The injured worker can’t just submit a claim to the employer’s liability insurance company and expect to be paid. The insurance company will fight to avoid paying a large settlement and may deny your claim entirely unless you file a lawsuit.

Employee liability lawsuits can result in large payoffs, but juries are unpredictable, and it will take time and an experienced, dedicated attorney to give you the best chance at winning your case.

If you’ve suffered a serious personal injury at work, contact an experienced workers’ compensation attorney to discuss the value of your claim and your best options to recover the amount of compensation you deserve.

Unlike workers’ comp claims where negligence isn’t an issue, employer liability claims require proof of the employer’s negligence. That means you’ll have to provide hard evidence that your injury or illness was caused by something your employer did wrong, or because your employer failed to act appropriately.

Proving Your Employer Liability Claim

A worker must prove the injury wouldn’t have happened if the employer wasn’t negligent in some way. Proof of negligence requires four elements:

  • The employer had a legal duty to protect the employee from undue harm or injury
  • The employer’s actions or omissions breached that duty
  • The employee was injured as a direct result of his employer’s breach of duty
  • The employee sustained damages resulting from the injury (medical bills, lost wages, etc.)

Example: Lack of Ear Protection

David is twenty-one years old. For several years he’s worked as a landscaper. His primary duties included using a blower to move leaves and other debris. The leaf blower he used creates noise at about 80 decibels. The medically proven maximum safe range for humans is about 60 decibels before hearing loss occurs.

Although David regularly asked his employer to provide ear protection, his employer failed to do so. Eventually, David permanently lost 50 percent of his hearing in both ears and needed hearing aids.

David filed a workers’ compensation claim for his injuries. Workers’ comp paid all David’s medical bills and a partial permanent disability award of $100,000.

David also filed a separate claim under his employer’s liability insurance, claiming his employer was negligent in failing to provide him with hearing protection. Following a lawsuit, a jury awarded David $100,000 for actual damages and $300,000 for pain and suffering.

Evidence to Prove Your Claim

As in any injury claim, evidence is the key to success. Without evidence, your liability claim will quickly be denied by the insurance company. With evidence, your employer will have a tough time trying to dispute your claim.

Photographs and video of the accident scene can be crucial. If you don’t have a digital camera, use your cell phone. There’s a good chance your employer will very quickly change the accident scene to remove evidence of negligence. The sooner you photograph and video the scene, the better.

Witness statements are another strong form of evidence. They don’t have to be formal or notarized. Ask the witnesses to write down what they saw and have them sign and date their statements. Be sure you have their contact information.

Example: Asbestos Inhalation

Tamara is twenty-eight years old and worked as an electrician for five years. Her primary duties included rewiring old buildings that were being refurbished for sale. After being ill for about a month, she had tests that revealed she was suffering from lung disease caused by inhaling asbestos. Her condition was untreatable.

Tamara filed a workers’ compensation claim and received medical benefits and a permanent total disability award of $300,000.

Through her attorney, Tamara also sued her employer for negligence for failing to warn her of the presence of asbestos and for not providing protective gear. Her doctor’s testimony linking her incurable lung disease directly to asbestos exposure was critical evidence in the case.

A jury awarded Tamara full medical benefits and $300,000 in lost wages. The jury also awarded Tamara $1 million for pain and suffering.

What is Employer’s Practices Liability Insurance?

Workers’ compensation and employer liability insurance provide coverage for on-the-job bodily injuries and diseases.

Employer practices liability insurance provides coverage when a worker alleges the employer engaged in wrongful termination, sexual harassment, invasion of privacy, discrimination, breach of contract, false imprisonment, wage and hour law violations, or emotional distress.

A worker’s right to file an employer’s practices liability claim can be based on the following laws:

  • Title VII of the Civil Rights Act of 1964
  • Americans with Disabilities Act of 1990
  • Civil Rights Act of 1991
  • Age Discrimination in Employment Act of 1967
  • Family and Medical Leave Act

Most employer’s practices insurance claims are employee complaints founded on civil rights violations such as:

  • Workplace harassment, including sexual harassment
  • Wrongful termination of employment
  • Emotional distress, including retaliation
  • Invasion of privacy
  • Defamation, including slander and libel
  • Discrimination based on ethnicity, religion, sexual preferences, handicap, sex or age

Example: Sexual Harassment

While Lisa was working at a fast food franchise, a male employee repeatedly uttered sexual innuendos at her. Lisa needed her job, so she reported the innuendos to her supervisor. The supervisor’s response was, “Boys will be boys,” and no action was taken against the male employee.

The sexual innuendos continued, and eventually, the male employee’s comments became sexually explicit.

Again, Lisa complained to her supervisor. The supervisor spoke with the male employee, who denied the allegation. The supervisor cautioned him about his remarks, but no other action was taken.

One day the male employee fondled Lisa. Unable to tolerate the situation, she quit her job and retained an attorney. Lisa’s attorney filed a claim for sexual harassment under the franchise’s employer’s practices liability insurance.

Her attorney invoked Section 103 of the Elliott-Larsen Civil Rights Act 453, which states:

“Discrimination because of sex includes sexual harassment, which means unwelcome sexual advances, requests for sexual favors, and other verbal or physical conduct or communication of a sexual nature.”

A jury awarded Lisa $100,000 in actual damages and $300,000 for her emotional distress.

An employer isn’t going to admit violating your civil rights. It could open the door to more claims against the company. Proving civil rights violations take substantial legal experience and skills, so look for attorneys with expertise in this area.

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