Question

Following a serious accident at one of its construction sites, Acme Construction is sued by the family of one of its employees, who was gravely injured. The injured employee is unable to return to work and has been declared permanently disabled. OSHA investigated the accident and has assessed a $500,000 fine against Acme for violation of workplace safety standards. This is not the first time OSHA has assessed fines against Acme. Acme maintains a workers compensation insurance policy, with employer liability (EL) limits of $1,000,000 per accident/disease/injury. Under the EL portion of Acme’s insurance policy, which of the following could potentially be covered:

  

		The OSHA fine/penalty
		The family's lawsuit
		The injured worker's disability payments
		Costs to remediate the hazardous conditions that led to the accident

Answer 1

The family's lawsuit

The Employer’s Liability Insurance plan extends the Worker’s compensation insurance policy and shall protect Acme from the financial loss for the aspects where the job-related injuries of the employee is not covered under the Worker’s compensation policy. In this regard, the family’s lawsuit shall be successfully covered by the insurance policy but with the limitation of offering $1,000,000 per accident/disease/injury to the employee. The other options shall not be covered under this policy because neither Worker’s compensation insurance nor EL insurance shall cover the fines imposed by OSHA otherwise, the safety would be compromised by the employers while the Worker’s insurance shall cover the disability payments hence these options are eliminated. The last option is not covered by EL as well.