9.2 - Employers Liability Flashcards
Explain the various aspects related to employers liability
Employers Liability
-employers are liable for any torts committed by their employees while employees are acting in the course of their employment
-similarly, employers negligently causing injury to their employees will be liable for damages
-employers are required to provide adequate and suitable working conditions and equipment for the use of their employees in carrying out their work duties
-reasonable care is expected in the selection of competent employees, and precautions must be taken to protect employees from injury that could be caused by dangerous machinery or operations
-supervision of employees and adequate instruction in the use or machinery and equipment is also expected of the employer in order to reduce the possibility of injury
-the two principal methods of protecting employers against costs arising out of injury to their employees are workers’ compensation and employers liability
Workers’ Compensation - Legislation
-workers’ compensation legislation (known as Workplace Safety and Insurance Board in Ontario) is in force in all Prov. and Terr. in Canada
-while legislation is similar in its intent, it differs in detail among the various jurisdictions
-before workers’ compensation legislation was passed, an employer could be sued for injuries to employees on the job
-however, employees were required to prove such negligence in court, which was not easy since the evidence was in the control of the employer
-in addition, employees rarely had the financial resources to pursue their claims through the courts, particularly if the injuries were serious enough that they could not work
-since this situation was not satisfactory, the various acts were passed to spread the cost of such injuries among all employers
-to combat these costly lawsuits against employers and to protect employees, legislation was passed to provide benefits to employees who are injured in the course of their employment
-Legislation applies to most types of employment and where it does, it is compulsory for employers to pay assessments to the respective boards that pay compensation to injured employees from the fund
-assessments are based on a rate against payroll, with the more hazardous types of industries paying the highest rates
-there are penalties against employers who fail to comply with the ‘Workers’ Compensation’ Act, but noncompliance by an employer does not affect the right of the employee to collect benefits as long as they are in a type of employment subject to the acts
-some categories of employees, such as farm employees (in some jurisdictions), domestic servants, casual employees of certain types, and certain clerical employees are excluded under the legislation
-in most jurisdictions, certain large employers, such as the railway companies, are allowed to pay compensation from their own resources on the scale laid out by legislation
Workers’ Compensation - Benefits
-the benefits available to the injured employees are set out but may vary among jurisdictions
-in general, medical expenses are paid without limit unless covered by a prov. or terr. health plan
-for total disability, compensation is based on a percentage of earning, but earnings are usually limited to a max amount for the purpose of calculating compensation
-if death results from the injuries, funeral expenses are allowed up to a specified amount and the widow(er) or her or his dependents may receive a lump sum plus a monthly payment
-such payments are usually payable for the lifetime of the widow(er) or until she or he remarries
-if there are dependent children, additional payments are made
-in addition to financial benefits, workers’ compensation boards are active in rehabilitation programs to assist disabled workers to return to active employment as quickly as possible, either to their former work or some other suitable work
-boards are also active in accident prevention
-generally the various acts provide that the employers’ premises and operations can be inspected by board representatives to ensure that proper safety precautions are being practiced
-recommendations can be made for improvement in safety and if the employer does not carry out such recommendations, the board has the authority to close the place of employment
-employees will also be compensated if they contract certain occupational diseases
-these diseases are usually specified in the acts and are subject to amendment as new ones are identified
-the benefits of these acts are available to employees regardless of fault or negligence on the part of the employers or other employees
-the only requirement is that the injury must have resulted from the employment of the injured persons.
-for example, an employee driving an vehicle who leaves work to do personal errands and gets into a car accident cannot claim workers’ compensation
-in return for the no-fault benefits paid to injured employees, they are prevented from suing their employers at common law
-in most jurisdictions, they cannot sue another employer who is also subject to the acts, but they can sue an employer or any other party who does not come under the act
-consider an employee who is driving a delivery vehicle during work and whose passenger is his co-worker. If the driver runs a stop sign and causes injury or damage to his co-worker, the co-worker is ineligible to sue the driver because both are covered under the respective ‘Workers Compensation Act’.
-if employees accept compensation rather than sue, the board is subrogated to all of their rights against the responsible parties
-taking away the right to sue has been challenged in the courts under the ‘Charter of Rights and Freedoms’. In ‘Piercy et al. v. General Bakeries Ltd.’ the Supreme Court of Canada held that the Workers’ Compensation Act or Newfoundland did not offend the equality provision of the Charter. The plaintiff was the widow of a man who died as a result of a work-related accident. The employer contended that the widow was only entitled to workers’ compensation benefits. The plaintiff claimed that sections of the Act that took away her right to sue contravened the Charter
Definition - “Employers Liability Insurance”
Coverage for the legal liability imposed on a employer to pay damages to an employee injured by the employer’s negligence. This is not workers’ compensation insurance, where special acts of legislation set out specifically the relationship between the employer and employees in certain circumstances and the formula by which awards in each case are computed
Employers Liability Insurance
-some trades and classes of employees are not subject to the various compensation acts
-an employer could be sued under common law if the employee is injured in the course of employment and the injured employee could successfully recover damages if the employer is found negligent. This exposure can be covered
-although there are still many employers liability insurance policies in use, in many instances, insurer amend the CGL policy by endorsement to cover the employer’s exposure to liability
-the endorsement deletes Section A. Bodily Injury and Property Damage Liability exclusions d, e, and f, thus providing coverage for claims or actions of bodily injury to an employee of the insured arising out of an din the course of employment by the insured in the business described on the declarations page. The endorsement is subject to certain exclusions
-unlike workers’ compensation, employers liability is not a no-fault coverage
-for a claim to be paid, the claimant must prove that the employer was both responsible for the injury and negligent
-if a separate policy is written, it contains basic limits per employee and per accident
-the rate is based on payroll and the premium is usually adjustable at the end of the policy term, subject to a stated minimum premium
-the policy is subject to certain exclusions that sometimes can be removed through negotiation
Definition - “Voluntary compensation insurance”
Protection that an employer may purchase to cover employees who are not covered by workers’ compensation insurance
Voluntary compensation for Employees Endorsement
-when employees are not covered under workers’ compensation legislation and employers have taken out employers liability coverage to protect such employees, employers may feel a moral obligation to compensate injured employees even if the employer is not legally liable
-voluntary compensation insurance is a method of doing this
-it pays compensation according to certain scheduled, which include weekly indemnity for total or partial disability and specified sums for dismemberment or death
-funeral and medical expenses are provided up to certain limits although medical expenses are a minor coverage where employees are covered under government health insurance plans
-this coverage is really a no-fault type of accident insurance, and while the limits may not be as high as provided under workers’ compensation, some remuneration is available regardless of an employer’s legal liability
-there are occasions when this coverage is written for the same benefits as provided under the workers’ compensation acts because in some jurisdictions, the employer has the option of buying the coverage from the workers’ compensation board or private insurers
-this coverage is always written as an addition to employers liability and never on its own
-an employee, in accepting remuneration under voluntary compensation coverage, is required to release the employer from any legal liability claims under common law
-therefore, the employee has a choice of accepting voluntary compensation benefits or suing the employer for negligence
-this coverage is rated on a payroll basis separately from employers liability
-the premium is usually adjustable at the end of the policy term, subject to a stated minimum premium
Contingent Employers Liability Coverage
-there are also occasions when employers liability insurance is required even if the employer is eligible under the acts
> in most jurisdictions, the legislation makes provision for employees normally based in one jurisdiction but working temporarily in another
-coverage is provided for a limited time period, which sometimes can be extended by applying to the workers’ compensation board
-in this way, the employees are covered by the board of their home jurisdiction while temporarily working outside of it
-however, there may be occasions when the extended period is exceeded or a trade covered in one jurisdiction is not covered in another
-employees could be in a position of not being covered by either the home jurisdiction or the one in which they are working
-if employees are injured during the course of such employment, they may be entitled to bring a common law action against their employer
> there are circumstances when employers may be called upon to pay the workers’ compensation benefits paid to employees because they have assumed certain liabilities under contract
> the workers’ compensation board may deny coverage to an injured worker on the grounds the injury occurred off the job
-the worker would be free to bring suit in tort against the employer
-the employer’s CGL insurer would be obliged to defend the action
-if the employer is found to be legally liable, the claim can be resubmitted to the board for payment
-the employer must follow the legislated rules to qualify for consideration
-for example, the employer is required to notify the board if an employee is out of the province for a longer period than is allowed by the legislation
-failure to remain within the guidelines will forfeit coverage under the workers’ compensation legislation
