Employment Liability Risks Quiz

Employment Liability Risks: Employer's Liability Insurance, Workers' Compensation, and Employment Practice Liability

• Occupational risks in the workplace can result in physical bodily injury, civil rights violations, and other losses to the employer.

• Occupational risks fall into two main types: health and safety risks, and civil rights violations.

• Health and safety risks fall under the domain of employer's liability insurance (EL) and/or workers' compensation (WC), while civil rights violations fall under employment practice liability insurance (EPLI).

• Employers owe a range of duties to their employees at common law to protect their health and safety, and breach of these duties renders the employer liable in damages to the employee.

• Historically, employers have been protected from liability by three defences, but today it is highly improbable that an employer can successfully defend a claim brought against them by pleading the volenti defence.

• Workers' compensation operates on a no fault (strict liability) basis, while EL pays where the employer is legally liable.

• EL indemnifies an insured employer for all sums they shall become legally liable to pay as damages following bodily injury, death or illness of an employee happening in the course and scope of employment.

• EL coverage can be on claims made or occurrence basis, while WC is born out of legislation and operates on a compulsory basis.

• WC compensates injuries and diseases from all sources, while EL only responds to injuries and diseases attributable to the negligence of the employer.

• EL and WC differ in several fundamental ways, including being a contractual arrangement vs a statutory scheme, pure insurance principles vs social insurance principles, and paying for both economic and non-economic losses vs only economic losses.

• Countries interact with EL and WC in three main ways: EL as the sole method of compensation, WC as the sole and exclusive method, and EL and WC co-existing on a complementary basis.

• Mixed systems include countries like the UK, Ireland, Italy, Netherlands, France, Zimbabwe, and South Africa, where an injured worker can qualify for WC benefits and also sue the employer for damages.Employer Liability Insurance and Workers' Compensation

• Employer's liability insurance (EL) is a type of insurance that covers employers against claims made by employees for work-related injuries or illnesses caused by employer negligence.

• EL is different from workers' compensation (WC), which is a no-fault system that compensates employees for work-related injuries or illnesses regardless of fault.

• In France, proof of mere negligence is not enough to qualify for damages; proof of gross negligence is required.

• The interaction between EL and WC affects the level of risk that insurers face under EL. In the Netherlands, WC benefits are attractive, so claims against employers are rare.

• In South Africa, the WC system has two pillars: COIDA covers general industry, while ODMWA covers diseases in mines and works.

• COIDA covers accidental injuries and diseases, and injured workers cannot sue their employers for damages under Section 35 of the Act.

• ODMWA covers compensable diseases in mines and works on a no-fault basis and pays compensation in a lump sum. Workers covered by ODMWA can sue their employers for damages under certain circumstances.

• Employment practice liability insurance (EPLI) covers employers against claims made by employees for violation of their civil rights, such as discrimination and wrongful dismissal.

• EPLI claims arise from failure to comply with employment legislation, contractual obligations, and internal policies.

• EPLI policies provide coverage on a claims-made basis and exclude claims covered under workers' compensation, labor relations, and occupational health and safety laws.

• Employers can reduce their exposure to EPL risks by identifying applicable laws and regulations, developing workplace policies and rules, ensuring compliance, establishing internal dispute resolution mechanisms, and monitoring and evaluating the entire risk management process.

• The workplace is a complex environment, and health and safety risks and civil violations of employee rights are the main concerns. Most countries rely on WC and EPLI to address these risks.Workers' Compensation and Employer's Liability Insurance

• The workers' compensation system is a no-fault system.

• The workers' compensation system provides benefits to employees who are injured or become ill due to their job.

• The employer's liability insurance can be used to complement the workers' compensation system.

• The employer's liability insurance covers claims that are not covered by the workers' compensation system.

• The employer's liability insurance covers the employer's negligence that causes employee injuries or illnesses.

• The workers' compensation system operates as the sole and exclusive remedy for victims of occupational health and safety risks in some cases.

• In some cases, the employer's liability insurance may be used in conjunction with the workers' compensation system.

• The employer's liability insurance is not required by law in all states.

• The workers' compensation system is mandatory in most states.

• The workers' compensation system provides benefits such as medical expenses, lost wages, and vocational rehabilitation.

• The workers' compensation system also provides death benefits to the dependents of employees who die due to job-related injuries or illnesses.

• The employer's liability insurance can help protect employers from lawsuits filed by employees who are injured or become ill due to their job.