In most states, Employer’s Liability Insurance and Workers’ Compensation Insurance work hand-in-hand. However, in Ohio, business owners that have any employees are required to purchase workers’ compensation insurance from the Ohio Bureau of Workers’ Compensation. Employer’s Liability Insurance is purchased separately, often along with the General Liability policy. This coverage protects the business from a major financial loss if a worker sustains a job-related injury or illness that workers’ compensation does not cover.
When situations arise where an employee sustains an on-the-job injury or occupational disease that happens to fall outside the workers’ compensation statute, employees have successfully sued their employer. Since workers’ compensation does not protect the business owner from suits brought by employees, Employer’s Liability coverage (also known as Stop Gap coverage) can be used to protect the insured.
Employer’s Liability coverage does not allow for an employee to recover twice for the same injury or occupational disease. It may appear, for example, an employee can collect damages from a third party and also collect workers’ compensation under his employer’s policy. Not so, as a provision is made to correct a double recovery situation.
Employer’s Liability protection is limited to injuries or occupational disease during employment just like workers’ comp. However, Employer’s Liability coverage exists to protect the employer against those claims that do not fall under the workers’ compensation statute.