What is the purpose of employers liability insurance?

• A. It protects the insured from situations not covered under a state's workers comp law
• B. It covers all medical expenses for employee injuries
• C. It pays wages to employees during disability
• D. It provides property coverage for workplace assets

Answer: (A)

Employers liability coverage protects the employer against claims and lawsuits that are not covered by workers’ compensation. Workers’ comp provides automatic, no-fault medical benefits and wage replacement for work-related injuries, but it generally bars employees from suing the employer in court for those injuries. When an employee sues for damages grounded in the employer’s negligence or for situations not covered by workers’ comp—such as failures to maintain a safe workplace or other acts outside the no-fault system—employers liability covers the legal defense and any damages awarded, within policy limits. This fills the gap between mandatory workers’ comp benefits and civil lawsuits the employee might pursue.

Medical expenses and wage replacement are handled by workers’ comp, so those aspects aren’t the purpose of employers liability. Providing property coverage isn’t the role of this insurance; that falls under property or general liability coverages.