Employer's Liability Insurance
Understanding the Importance of Employer's Liability Insurance
Employer’s Liability Insurance covers the liability of employer’s towards their employees i.e. it pays any additional compensation over and above the WC benefits upon a court judgment of negligence on the part of employer.
Limit of indemnity can vary from AED 100,000/- to millions depending on the requirement of clients.
In many regions across the globe, having worker’s compensation and employer’s liability insurance is not just a choice but a legal requirement for businesses. It’s common practice for companies to exhibit a valid insurance certificate at all work premises.
In the current legal climate, the likelihood of organizations facing liability claims for workplace accidents has significantly increased. When accidents happen, the courts often award hefty compensation amounts to the affected employees. Consequently, the financial burden on businesses due to worker’s compensation and employer’s liability claims can be quite substantial.
Legal Compliance
Insurance ensures that companies adhere to the local laws and regulations, thus avoiding any legal penalties or sanctions.
Financial Protection
ELI provides a financial cushion by covering the legal fees and compensation costs, which could otherwise be financially draining for a business.
Employer's Liability Insurance Features
- Employer's Liability Insurance is a safety net for employers, offering financial protection when faced with compensation claims.
- This insurance kicks in when an employer is legally obligated to compensate employees for injuries or fatalities that occur during work hours, under common law.
- This policy not only covers the compensation amount but also takes care of the legal expenses involved in defending against such claims, provided the insurance company has given its prior approval.
- The compensation for damages, along with the costs of legal proceedings, will be determined according to the laws of the UAE, with jurisdiction resting within the United Arab Emirates.
- This insurance ensures a smoother financial journey for employers while adhering to legal obligations, making it a crucial part of a responsible business strategy.
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Frequently Asked Questions
What Exactly is Employers Liability Insurance?
Employers Liability Insurance is a policy that provides financial protection to employers against claims arising from employees who might suffer an injury or illness due to their work. In the UAE, where the workforce is a blend of numerous nationalities and job types, ensuring the safety and well-being of employees is paramount.
Is Employers Liability Insurance Mandatory in the UAE?
In the UAE, Employers Liability Insurance is not mandated by federal law across all emirates. However, it is highly recommended due to the potential high costs associated with employee claims related to workplace incidents. Some free zones and specific industries might have their own regulations that necessitate having such insurance.
What Does Employers Liability Insurance Cover?
Employers Liability Insurance typically covers the legal costs and any awarded damages related to an employee’s claim concerning a work-related injury or illness. This can include medical expenses, loss of income, and compensation for pain and suffering, ensuring that the employer is not financially burdened by such incidents.
How Does the Claim Process Work?
When an employee files a claim, the employer must immediately notify their insurance provider. The insurer will then evaluate the claim, considering the legal and medical aspects, before determining the validity and the compensation amount. The employer is required to provide all necessary documentation and cooperate fully during the investigation.
