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What is the difference between employers liability insurance vs workers compensation? Commercial umbrella insurance and excess liability are provide coverage above the limits of other underlying liability policies – but what is the difference?

Employers Liability Insurance vs Workers Compensation

Employees like to know they are covered with safety laws and insurance. Individuals that work dangerous physical jobs, especially, take this aspect extremely seriously. Any employee, however, should be covered should an incident happen in the workplace.

Something as simple as a fall in the bathroom may be covered under policy rules. A claim, however, cannot be made until you understand the type of insurance that covers the situation. The differences between employers liability insurance vs workers compensation is often misunderstood.

Basic Injuries

Employers liability insurance vs workers compensation – most basic injuries fall into the category of worker’s compensation. This coverage is put in place by laws to help protect all parties involved. Employer’s benefit from this coverage, as they may otherwise be sued by injured workers. If an employer falls while stocking shelves or sprains their wrist lifting heavy items, workers compensation steps in. Exposure to dangerous items, such as chemicals in a plant, is also considered work related. Any injury or disease that simply happens as a result of normal work activity falls under worker’s comp.

Third Parties

When an employee is injured there are usually other people that suffer from the incident. When a person is the main provider for their family, the spouse and children may be without support. This makes household bills a part of the claim. This part of the claim is covered by employer’s liability insurance. This coverage also extends to an injury resulting from care of the original worker.
Lifting a spouse and other responsibilities may cause injury to the family member. Other family members may also have to take on more work to cover household expenses. This often results in exhaustion and illness. These issues are also covered by the liability portion of an employer’s insurance.


In some cases, the blame is shifted to the manufacturer of equipment. If the employer can prove the injury happened as a result of a machinery malfunction, instead of poor maintenance, the maker of that product becomes responsible. This process may draw out a claim. Further investigation is often necessary to address this sort of complication. In this case, the employer turns around and sues the manufacturer for causing insurance expenses.


The first thing you need before filing a claim for any type of coverage at work, is evidence. Employer’s liability insurance somewhat works together with worker’s compensation laws. Liability picks up where worker’s compensations leaves off. Labor laws in the United States protect employees through worker’s comp. To extend the coverage to include liability, there needs to be proof of negligence on the employer’s part.
This negligence must be related to the employer’s failure to provide a safe work environment. Worker’s compensation covers almost any injury that happens in the workplace. Employers liability insurance vs workers compensation – employers liability coverage comes when proper safety measures have not been applied. These safety measures often include the maintenance of machinery, supply of safety equipment, and proper training.
When an injury or illness happens at work, documentation is key for receiving good benefits. For best results you should, take pictures, save doctor’s documentation, and secure witnesses. Employers are often reprimanded or investigated in severe injury cases. Concern over this consequence often leads to some tough negotiations. Evidence is your best protection.

Excess Liability Insurance vs Umbrella - The Bottom Line

We hope this article on employers liability insurance vs workers compensation has been informative. They are sold together to the business. They are dependent on each other to cover all scenarios of workplace injury and illness. Workers compensation has been put into place due to state laws. It is not possible to purchase these two items separately. They are simply two different sections of the same policy. Between the two sections of insurance, employees are covered completely.

Third party claims are also covered under liability. The employer’s family is eligible to receive benefits if they are directly affected in a negative way by the incident. Workers compensation claims are limited to basic work related injuries where no negligence has occurred. Compensation laws are an important part of workplace security.

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