Difference Between Employer Liability Insurance (ELI) and Workers Compensation Insurance (WCI)

Employer Liability Insurance (ELI) and Workers’ Compensation Insurance (WCI) are two important insurance coverages to protect the interests of employees as well as employers. However, there are certain differences between the two. Due to these differences, it can result in unfair litigation and consequently anxiety for the parties involved. The differences between ELI and WCI are related to where they apply and what they cover. We will discuss about them here briefly.

Where they apply

Employer liability insurance

As an employer, you are required to take out employer liability insurance in the UK. Not buying carries a penalty according to the law. In certain situations, your employees may feel that you are responsible for a work-related injury or illness they may suffer and will sue for it. If it is really a case, it can bring expenses such as hospitalization, financial compensation and the like. ELI helps you in such circumstances.

While you as an employer are required to have ELI, your employees must show that the work-related injury / illness is due to their negligence. Imagine yours is a lumber business. While working, your employees must have the equipment, training, and skills necessary to operate them. If you employ them without teaching safety rules, conducting training and verifying suitability, and they are injured, it will amount to your negligence under the rules outlined in the Employer Liability Insurance Act and employees will likely feel appropriate to sue you. . because you are responsible.

Workers compensation insurance

On the other hand, workers’ compensation insurance is coverage for the well-being of employees. It depends on the circumstances that are the tone of the relationship between employer and employees. Therefore, if you are more concerned about the health and safety of employees, you should purchase this insurance. It doesn’t matter if it was your fault or the fault of your employees that resulted in illness, accident or death, this insurance comes to your aid.

Coverage

Employer liability insurance

As an employer, you must go to court if the affected employee sues you. You must pay financial compensation and assume hospitalization and medication. ELI covers all these expenses.

In addition, for employees, ELI covers permanent and temporary disability, injury, and wrongful death in the workplace. It also covers the cost of the litigation.

Workers compensation insurance

For employers, WCI is a good Samaritan. In most cases, it ensures that its employees do not resort to litigation. However, in such an unfortunate event, WCI covers the expenses due to the litigation. It covers the economic expenses that will be given to the employee affected by work-related injuries, illnesses or even death.

Employees, when accustomed to the workplace, according to WCI, are guaranteed to get compensation from the employer to cover medical and hospital expenses and a certain portion of wages. In most cases, it is two-thirds or more. WCI covers litigation expenses for the employee. In general, WCI takes care of the situation and ensures that litigation by employees is avoided.

WCI covers compensation (salary) in the event of a temporary disability during the period of absence. If the individual has a permanent disability and is unfit for employment in the current occupation, WCI covers the costs of vocational training and rehabilitation and the cost of looking for a job, if desired.

Although both ELI and WCI are intended to protect the interests of employees and employers, there are differences in how they are applied. You need to understand them and acquire a cover according to the needs of your business.