Usually, employers in New Jersey purchase employers’ liability insurance along with their workers’ compensation insurance. If you are an employer, there are several scenarios in which you may be thankful to have this additional coverage.
Third-party lawsuits
Sometimes when an employee receives workers’ compensation, they can still bring a claim against a third party to receive additional compensation. Then, the third party sues the employer, and your employer’s liability insurance pays the claim. For example, a tree pruner falls from a tree while using a chainsaw. He receives workers’ compensation for his injured leg but also sues the chainsaw manufacturer for faulty equipment. The chainsaw manufacturer sues you for improper training, and your employer’s liability insurance pays the claim.
Loss of consortium
Assume that an employee died while working for you. In that case, the person’s spouse can receive compensation from workers’ compensation, but they may also bring a lawsuit against you for the loss of that person’s income. In that case, your employer’s liability insurance may pay the spouse more money. The employee does not have to die but only needs a long-term disability caused by a job injury.
Consequential bodily injury
Assume that an employee gets injured on a job and needs a caretaker. Then, the caretaker receives an injury taking care of the injured employee. In that case, the caretaker can sue you, and your employer’s liability insurance covers you.
Dual-capacity lawsuits
Suppose you have an employee who gets injured on the job, but they are also a vendor. In that case, you may need coverage from your employer’s liability insurance because they can claim coverage under workers’ compensation as your employee and under your liability insurance for their other role.
Most insurance companies bundle workers’ compensation and employers’ liability insurance together because you need both to be fully covered in the event of an accident. That is why people often call the liability insurance workers’ compensation part two.