Employers liability insurance protects the insured from situations that are not covered under a state's workers compensation laws. What is its purpose?

• A. To pay benefits to employees for injuries arising out of employment
• B. To cover only property
• C. To insure vehicles
• D. To provide health insurance for dependents

Answer: (A)

Employer's liability insurance exists to close the gap between what workers' compensation provides and what an employee can sue the employer for under common law. Workers' comp pays benefits to the employee for work-related injuries regardless of fault. But there are situations where the employee can bring a civil lawsuit against the employer for damages due to negligence or other wrongful acts. Employers liability covers those claims and the defense costs up to the policy limits. It does not fund employee benefits (that’s the role of workers’ comp), nor does it cover property, vehicles, or health insurance for dependents.