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Employers Liability

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What does employers liability cover?

Employers Liability Insurance

Employers Liability Insurance helps protect businesses by covering costs that may arise when an employee gets injured or falls ill because of their job. This insurance is there to help cover legal fees, medical expenses, and compensation payments that aren't covered by ACC.

Why do businesses need employers liability insurance?

Legal Protection

Even if you believe your workplace is completely safe, accidents happen. If an employee were to get injured or become ill because of their job, they might decide to sue your business. Employer's liability insurance helps cover the costs associated with legal defense and any required compensation.

Financial Security

Medical expenses can be extremely high. Without insurance, your business would have to pay out of pocket for an employee’s medical bills and any other costs associated with their injury or illness. Employer's liability insurance helps cover these expenses, ensuring that a single incident doesn’t lead to financial ruin.

Peace of Mind

Knowing that you have insurance to protect your business in case of an accident can provide peace of mind not just for you, but for your employees as well. They can feel safer knowing that if something were to happen, there are measures in place to support them.

What exactly is employer’s liability insurance?

This insurance is designed to help protect your business in the event that an employee gets injured or falls ill because of their work. Here are some key points to understand:

  • Coverage: Employer’s liability insurance typically covers legal fees, medical bills, lost wages, and any compensation awarded to the employee. It can also cover expenses related to rehabilitation and ongoing care, if necessary. 

  • Policy Limits: Like any insurance policy, employer’s liability insurance has limits. These limits will be outlined in your policy, and it’s important to understand them to ensure you have adequate coverage.

  • Exclusions: There are also certain exclusions to be aware of. For example, employer’s liability insurance might not cover injuries resulting from intentional acts or known unsafe working conditions.

How does employer’s liability insurance work?

Here’s a step-by-step breakdown:

  1. Incident Occurs: An employee gets injured or falls ill due to their work.
  2. Claim is Filed: The employee or the employer files a claim with the insurance company.
  3. Investigation: The insurance company investigates the claim to determine if it is valid and to assess the extent of the injuries or illness.
  4. Coverage is Determined: If the claim is approved, the insurance company determines how much coverage is available based on the policy limits.
  5. Payment is Made: The insurance company pays out the necessary funds, up to the policy’s limit, to cover medical bills, legal fees, and any other covered expenses.

Disadvantages/Advantages or Pros/Cons

  • Financial Protection: Perhaps the biggest advantage is the financial protection it provides. Without it, your business would be responsible for covering all costs associated with an employee’s work-related injury or illness.

  • Legal Support: Employer’s liability insurance typically includes access to legal support, which can be invaluable if you find yourself facing a lawsuit.

  • Employee Trust: Having this type of insurance can also help build trust with your employees, as they know that you have their back if something were to happen.

  • Cost: One of the main disadvantages is the cost. Premiums can be high, especially if your business operates in a high-risk industry.

  • Not Always Comprehensive: Depending on your policy, there might be gaps in coverage. It’s important to read the fine print and understand exactly what is and isn’t covered.

  • Can’t Prevent Lawsuits: While employer’s liability insurance can help cover costs associated with a lawsuit, it can’t prevent lawsuits from happening in the first place.

Common misunderstandings

What are some common misunderstandings about employer’s liability insurance?

  • It’s Required by Law: In New Zealand, employer’s liability insurance is not legally required. However, that doesn’t mean it’s not important.

  • It Covers All Work-Related Injuries: Employer’s liability insurance does not cover all work-related injuries.  There are exclusions and limitations such as not covering accidents or injuries covered by ACC. 

  • It’s Too Expensive: While the premiums can be high, the financial protection it provides can far outweigh the costs. Without it, a single lawsuit could potentially bankrupt a small business.

How can Gerrards help?

So, how can Gerrards, as an insurance broker specializing in business insurance in New Zealand, assist you with employer’s liability insurance?

  • Expert Advice: We can provide expert advice to help you understand your risks and choose a policy that provides adequate coverage.

  • Comparing Options: We can help compare different policies and insurers to find the one that best fits your needs and budget.

  • Ongoing Support: Once you have a policy in place, we are here to provide ongoing support, helping with any claims that might arise and ensuring that your coverage continues to meet your needs.

  • Peace of Mind: Knowing that you have a knowledgeable and experienced team on your side can provide peace of mind, allowing you to focus on running your business.

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