IOSH Managing Safely Practice Test

What does employers' liability insurance protect against?

1. Liability for damage to property

2. Injuries sustained by employees during their employment

3. Claims involving contractor negligence

4. Losses due to fraud within the company

The correct answer is: Injuries sustained by employees during their employment

Employers' liability insurance is designed specifically to protect businesses from the financial repercussions of claims made by employees who sustain injuries or illnesses while performing their work-related duties. This type of insurance covers compensation claims that employees may file if they believe their employer has been negligent in ensuring their safety or well-being at work. The financial aspects can include medical expenses, lost wages, and any other associated costs that arise from their injuries. This coverage is essential for employers as it helps mitigate potential lawsuits and financial losses related to workplace incidents, promoting a safer work environment through the acknowledgment of employee rights and responsibilities. The other options, while they refer to important considerations in the realm of business insurance, do not accurately reflect the specific purpose of employers' liability insurance. For example, damage to property pertains to property insurance, contractor negligence refers to general liability or specific contractor coverage, and losses due to fraud typically fall under fidelity or crime insurance. Thus, the focus of employers' liability insurance on employee-related incidents makes it crucial for protecting both employees and employers within the workplace context.