What Does Employer's Liability Coverage (EL) Mean?
Employer's liability coverage refers to Part II of the workers' compensation policy, and it protects employers from liability issues following an employee injury that Part I does not cover. Thus, every employer who purchases workers' compensation automatically has this coverage.
Insuranceopedia Explains Employer's Liability Coverage (EL)
Workers' compensation acts as a no-fault insurance that awards benefits to the employee as long as they prove the injury occurred on the job. However, should the injured employee or their spouse sue the employer for negligence, employer's liability would financially protects the latter party. For example, if the company does not routinely perform maintenance on a piece of machinery that malfunctions and harms an employee, the latter may sue for employer negligence. Employer's liability would help pay for the medical services, transportation to and from medical treatment, and pain and suffering. However, it does not cover punitive damages.