Understanding Employer Liability and Workplace Injuries


As a business owner, it's essential to understand necessary precautions regarding workplace liabilities and employee responsibility. Part of it means understanding that unintentional damages and lawsuits are part of every business, big or small. For that, you need to have a firm understanding of which damages are your financial responsibility and which aren't.

One area you should thoroughly understand is employer liability, and employee injury and workplace incident liability. 

Workspace Safety Expectations

As a business owner and employer, you're legally responsible for meeting a set standard of workspace safety for your employees and customers. Cutting corners that make your business's worksite an unsafe location that poses safety and health hazards to your employees has serious negative consequences. It can drastically increase accidents and employee turnover rates and skyrocket essential insurance policy premiums.

Some insurance companies and states often require that you meet set safety standards and pass compliance tests before you can purchase their insurance or even start business operations. It's best to check and adhere to high safety and security standards to get licensed and insured in such a scenario.

Workers' Compensation Requirements

An essential step before deciding to start a business or opening a new branch is studying and understanding federal and local workers' compensation laws. While requirements differ by state, almost all U.S. states require businesses to carry a workers' compensation insurance policy for their employees.

The laws often vary depending on the type of employees you have. For example, some states exempt businesses from having to cover independent contract workers. On the other hand, some states are strict with their workers' comp insurance laws, requiring business owners to have insurance for all employees, full-time and part-time. 

Workers' Compensation Insurance Part B

Workers' compensation insurance "part B" or "part 2" are two commonly used names for employer liability insurance policies. Employer liability insurance often protects employers from financial loss due to an employee experiencing an injury or illness that's work-related but isn't covered by their standard workers' compensation insurance. It also covers legal costs such as hiring a lawyer or paying a settlement in the event your employee sues following their injury. Although generally employees waive their right to sue when accepting workers’ comp, there are exceptions in cases of gross negligence or intentional harm by the employer. Also, the spouse of the injured or a third-party can still pursue legal action.

Workers' compensation insurance part B pays the affected employee's medical bills, replaces up to 66.66 percent of their salary, as well as deserved compensation, disability payments, and death benefits. 

Part B workers' compensation insurance is especially important because it pays for workplace injuries caused by employer negligence. Employer negligence may include not fixing essential infrastructure, disabling or removing security mechanisms on heavy machinery, or not scheduling regular maintenance to high-risk machinery and assets such as elevators, smoke alarms, and fire detectors.

In most states, purchasing a workers' compensation insurance part B plan is a fairly straightforward process. However, in states with a monopolistic state fund—in which the government is the only provider for worker's compensation—it's different. In such states, worker's compensation insurance policies purchased through state funds don't include employer liability coverage. In these states, you'd have to purchase it independently from a private insurance provider.

Employer Negligence and Intentional Harm

It's important to note that employer liability insurance doesn't entirely protect you as the employer. If the injured employee decides to pursue a lawsuit against you and court rules that their injury was due to employer negligence, intentional harm, or illegal activity, your liability insurance policy would most likely only cover your legal fees. This excludes the resulting penalty or court-ruled compensation.

The Importance of Understanding the Law

Understanding the law is the first step to complying and receiving its protection when you need it the most. Your business may need numerous types of insurance policies depending on your location, industry, employment type, and the number of employees you hire. Securing the right coverage, where you save as much money as possible while ensuring a safe future for your business, is a tricky but essential balance to find.

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