Employer’s liability refers to the legal responsibility that the employees made to their employer in the employees’ bodily injury claims due to the employer’s intentional act, negligence or liability without fault.
Although most people’s first reaction could be work injury compensation, in fact, the employer’s legal liability includes many other aspects not limited to that.
In general, the responsibility of compensation to an employee who suffered from body injuries due to their employer’s action in the employment process, whether it is deliberate, with or without fault, all belongs to the liability of the employer. In many cases, employer’s liability can overlap with other tortious liabilities.
If bodily injury (including occupational diseases) of an employee was caused by the employer failure to provide a safe production environment according to respective regulations or equip with corresponding protective gears for safe production, the employer would simultaneously violate the “Labour Law”, “Work Safety Law”, “Prevention and Control of Occupational Diseases Law” and “General Provisions of the Civil Code” of the People’s Republic of China. Besides the eligibility to claim employment injury insurance by law, the employee also has the right to propose respective compensation requests to the employer.
Additionally, in cases of misconduct during the employment process such as violence, harassment, or forced labour using unlawful restriction of personal freedom, insult, corporal punishment, battery, unlawful search or false imprisonment of the employee, the employer bears the criminal responsibility for the act if it constitutes a crime.
Meanwhile, the employer could be legally responsible for the body injuries of employees caused by inappropriate employment practices or work arrangements such as arranging women to engage in physical labour of the third degree of intensity as specified by the state during their menstrual period, pregnancy or breastfeeding and other prohibited works during those periods.
It can be seen that only paying Social Insurance for employees cannot fully cover the employer’s legal responsibilities for businesses. In their growing process, many companies could have some degree of errors and omissions made in their personnel management after all. Similarly, inadequate control and other factors during production process could lead to major accidents. This not only introduces property loss to businesses but also a large amount of employer liability claims.
What is Employers’ Liability Insurance?Employers’ Liability Insurance covers liability risks of the Insured (employer) against claims or legal liability under employment contracts for financial compensation from costs resulting from employees’ injuries, deaths, and related occupational diseases while working during their employment period.
This kind of insurance predominantly covers the compensation of damage caused by the Insured’s negligence or includes no-fault liability into its coverage. But the intentional acts of the Insured will be listed as exclusions.
The following will usually be considered as the employer’s fault or negligence liabilities:
- The employer offers a dangerous working environment, mechanical tool or working process.
- The employer appoints incompetent managerial staff.
- Negligence of the employer, for example failure in providing qualified protective gears to the respective hazardous occupation.
In these situations which involve no intentional actions, the case will be considered as negligence of the employer. And the employer will be responsible for the financial compensation of the bodily injury caused.
Liabilities arising from the following reasons are usually excluded:
- bodily injury to the employee due to war, riot, strike or nuclear risk, etc.
- intentional acts or gross negligence of the Insured
- financial compensation liability of the Insured to their contractors’ employees
- liability of the Insured under a contract
- injury of the Insured’s employee arising from his or her intentional act
- injury of the Insured’s employee arising from illness, contagion, childbirth, miscarriage and the internal and surgical operations performed therefrom.
Work injury compensation normally pays the employee. Once the employee is injured in an accident, sick or even dead while working, he or she will only file a claim against the employer. Employers’ Liability is a commercial insurance product solely for and will pay to the insured – employer.
With a relatively low premium, this product can help employers to mitigate risks through its comprehensive coverage to cover the employers’ legal liabilities and related fees caused by their employment process and errors and omissions in their actions. Additionally, it covers the compensation payable to the employees according to law due to accidents, subsidies for occupational diseases, lost work time, etc. When an employee has an accident or suffers from incapability as a result of a prescribed occupational disease, this kind of insurance could provide compensation to the employee and hence reduce the burden of claims and risks for the employer.
If you have any questions about Worker Injury and Employers’ Liability Insurance, please contact us.
