Employers Liability Insurance

What is the employers liability insurance?

This type of policy is similar to the mandatory auto insurance in the sense that it does not reimburse the person who buys the policy, but third parties that he may have caused damage to. In the case of employers, this kind of policy is especially needed in the case of a big company, whose main activities are likely to harm its employees, either physically or psychologically.

Who can conclude such a policy?

Such insurance can be concluded by any legal entity that engages employees by signing individual employment contracts, the civil agreements, contracts of school and professional practice agreements.

What are the risks covered by such a policy?

Insurance covers material losses that the employer would suffer because of attracting civil liability for damage caused to its employees by the company’s fault.

Compensation

In the event that one of the risks insured occurs, the insurer is obliged to pay the entire amount stipulated in the policy, provided that the insured party can make proof that one of the following events has happened:

• damage caused to the employees through injury, or death of an employee, having an employer-related cause
• damage caused to employees by damage or destruction of their personal property during working hours
• expenses incurred by the insured in the civil justice system (court costs necessary for the proper conduct of Justice - these costs have to be approved by the court)
• costs that the injured has taken to fulfill the legal formalities in order to compelling the insured to pay damages if the insured was forced by court order to pay them

Compensation beneficiaries

Compensation may be paid to the insured, or directly to the injured, with the consent and prior written notification of the insured, in case that the injured has not already been compensated by the insured. In case of death, the compensation will be paid to the legal heirs of the deceased.

Validity of the insurance policy

The insurance is valid only in the time frame stipulated in the policy and only applies to the events that have taken place in the countries specified in the policy.

Exclusions

The majority of the insurance companies will not include in the policy and will not pay compensation for:

• labour disputes
• employment disputes

When can an employee demand damage expenses from the employer
To claim compensation from the employer, the employee must demonstrate that the affected illness, injury or death is a result of the work environment. For this:

• there must be a direct link between the employee’s occupation and the disease
• occupational disease has occurred due to a factor that could not also occur during the time that he is not at work
• match the character of his occupation or be an occupational disease.

Insurers have reported to having paid the largest amount for the employer’s liability insurance. This is mostly because these payments are in connection with illnesses and professional consequences that can be found even after many years after the employment contract of an employee has ceased. Speaking in absolute terms the amount of damages in this line so far goes beyond $ 100 billion globally and it is comparable to the damage done by major natural disasters.