Labor civil liability insurance is a tool to protect both the employer and the worker from financial exposure due to incidents or accidents in the workplace. The employer uses the insurance to ensure financial stability and limit out-of-pocket payments due to claims, and the employee may feel more comfortable reporting injuries and accidents knowing that the employer is covered and that puts fewer jobs at risk.

Workers’ compensation is a popular type of insurance. When a worker is involved in accidents on the road, employers who have paid their premiums can often refer such employees to health care facilities for care at no cost to the employee or employer. The costs are paid by the insurance company.

Another form of this liability insurance is colloquially called ‘dead farmer’ insurance. It is labor civil liability insurance, a life policy, which is contracted by an employer and which does not directly benefit the employee. It protects the employer from losses and liabilities resulting from the death of key personnel and provides some additional financial stability. This type of insurance is quite controversial: many employees feel that it is unfair for the company or corporation to benefit from their death in any way and that it creates a conflict of interest for the company regarding workplace safety issues.

This insurance is generally for service industries, such as doctors and lawyers. For example, either of you may have ‘malpractice insurance’ that covers you in case a patient sues the doctor or lawyer for malpractice. However, manufacturers who make products are generally covered by product liability insurance if the use of the product results in a lawsuit, either class or individual. Other forms of employment liability policies are policies that cover associations, sexual harassment claims, and/or wrongful termination.

Knowing the state and federal laws regarding workers’ liability and tort insurance is probably the safest bet for limiting both financial and personal exposure, regardless of the industry in which you work. Insuring a business against workers’ liability is not only a financially sound idea, but one that shows wisdom, judgment, and a vision for the future.