What Is Employer Liability Insurance And How Is It Different From Automobile Liability Insurance?

It has become vital that employers protect themselves and their businesses with Employer Liability Insurance.

During the past few decades, our society has become riddled with litigiousness and an increasing number of insurance companies. Everybody is quick to take legal action against anybody else and more and more molehills are being transformed into mountains.

Several legislations were passed which led to the birth of this sue-happy era, but the most significant were the Americans with Disabilities Act of 1990 and The Civil Rights Act of 1991, which widened the scope of what an employer could be held liable for in terms of treatment of past, present, and prospective employees. This scope became so broad that in 1992, insurance companies began offering Automobile Liability Insurance in addition to Employer Liability Insurance to cover claims presenting allegations of violating these acts where they were previously incorporated under General Liability Insurance policies.

This type of insurance is meant to protect the company under a wider scope as its own legal entity in addition to its employees. For example, Automobile Liability Insurance will not indemnify a company for Defense costs in cases of unjust termination, sexual harassment, discrimination, or slander. Punitive damages are often excluded from thes plans, however, as they are seen as just punishment for intentional harm done by insurance companies.

Typically, insurers will offer limits of $3 million to $25 million and usually a deductible of approximately $25,000 is required before one can receive indemnification for a claim. The indemnification will take effect any time a claim is filed by an employee with the Equal Employment Opportunity Commission or other state employment rights organization, so the insurer should be notified instantaneously. These charges may be settled so quickly that a formal lawsuit may not have to be filed, saving the charge from being reported.

Employer Liability Insurance coverage is available from a number of U.S. and international insurance companies. Some of these include: Lexington Insurance Co. in Boston, MD, Chubb Group of Insurers in Warren, NJ, and Zurich-North American Insurance Co. in Schaumburg, IL. Many other insurers that offer this type of policy can also be found on the world wide web and usually rate quotes can be extracted from forms on their websites and policies can be applied for electronically, sometimes at a discounted rate. Coverage rates will vary depending on what state the business operates in, employee turn-over rates, the size of the company, its risk analysis, and also on the management practices the company employs.