Employers Liability Insurance vs. Workers Compensation

If you are a business owner you have to ensure that your company is adequately protected. This means opting for the right insurance policy is a crucial business decision. Employers liability insurance and workers compensation insurance are often used interchangeably, but there are a few differences between the insurances. The article below highlights the difference between employers liability and workers compensation insurance.

Read more
Unlimited workmen liabilities covered starting just ₹1500*

Get right expert advice

Hassle free policy

Speedy Claims

Fast-track your search with instant quotes from top insurers

Get quotes & protect your workers in 5 mins

Step 1/2
Covers Death & Disability
Covers Injury due to Accident
Covers Legal Expenses

Get quotes & protect your workers in 5 mins

Covers Death & Disability
Covers Injury due to Accident
Covers Legal Expenses
secure-icon We don't spam
Get Updates on WhatsApp
View Plans

Get quotes & protect your workers in 5 mins

Step 2/2

What is Workers Compensation Insurance?

Workers compensation insurance is commonly known as employees compensation insurance or workmen insurance. It is a commercial insurance policy. It mainly covers the legal liability towards its employer by providing compensation in case of an accident that causes injury or kills the employee during employment. It also covers diseases caused or aggravated due to employment conditions.

For example, if one of your employees/workers fractured his hand in the factory while operating machinery. Then, in this case, the workers compensation insurance can help pay for the treatment as a means of compensation.

What is Employers Liability Insurance?

Employers liability insurance is also a type of commercial insurance that provides financial protection to the employers if an employee sues the employer for a work-related injury. Additionally, this insurance also covers the legal cost and third-party claims.

In continuation with the above example, if the employee/ worker feels that workers compensation didn't cover all the expenses, then the worker can file a lawsuit against the employer for poor machinery. The legal cost incurred by the employer (whether or not the employer is liable) can be covered under employers liability insurance.

Difference Between Employers Liability and Workers Compensation

Since both these policies are designed on similar lines, it is pretty natural to get confused between them. We have already stated the basic idea of both the policies with an example for better understanding. Further, we shall look at the differences between them. 

Workers Compensation Insurance Employers Liability Insurance
What is it? Legal liability by the employer to pay compensation in case of injury caused to the employee Financial protection to the employer to pay for compensation and legal expenses
Coverage  Injury caused due to a disease
Injury getting worse due to employment conditions
Injury caused due to accident at the workplace
Partial and permanent disablement
Death or temporary disablement
Third party claims: For example, if the employee files a case against the vendor of the machinery and the vendor sues the employer for non-maintenance.
Loss of consortium: A dependent of the injured/deceased employee can sue the employer for negligence.
Dual capacity: If a product manufactured by the employer injures the employee, then he can sue the employer even as a manufacturer of the product.
Consequential bodily injury: If the employee claims that the injury is caused due to high level of stress at work.
False claims
Scope Narrow Broader
Mandatory Yes No
Amount payable As per the wages system No limit


There is a major similarity between workers compensation insurance and employers liability insurance. Both cover workplace-related injuries or illness, but in different aspects. But, when it comes to practice, they are highly complementary. It is to be noted that these policies work in tandem to protect businesses from expenses related to employee injuries.

Written By: PolicyBazaar - Updated: 16 June 2023

Now help your friend get Business Insurance

Your referral is greatly appreciated!

Our team will reach out to your friend soon to help with their business insurance requirements.

Workmen Compensation Insurance Articles
The Workmen’s Compensation Act, 1923, is a type of social security legislation that was enacted to make the...Read more
19 Nov 2020 by Policybazaar 43072 Views
Under the Workmen’s Compensation Act, compensation is offered to the workers and their dependents in case of...Read more
01 Apr 2020 by Policybazaar 23898 Views
It is a known fact that a company's success depends on its employees. Each employee expects a secure job and gets...Read more
23 Aug 2022 by Policybazaar 3972 Views
In India, various insurance policies provide different kinds of cover to the employees of an organization. Being...Read more
05 May 2021 by Policybazaar 11549 Views
Employee and worker safety is an integral part of the smooth functioning of the business. Worker’s safety is a...Read more
16 Nov 2022 by Policybazaar 5349 Views
Workers' compensation claims can be a significant financial...Read more
09 Apr 2024 by Policybazaar 16 Views
Many employers mistakenly believe that Workers' Compensation and...Read more
08 Apr 2024 by Policybazaar 18 Views
A workplace injury can be a stressful and disruptive event for...Read more
08 Apr 2024 by Policybazaar 25 Views
In the fast-paced world of entrepreneurship, small businesses...Read more
15 Dec 2023 by Policybazaar 255 Views
In the fast-paced world of transportation, workers, including...Read more
15 Dec 2023 by Policybazaar 318 Views
Policybazaar for Business - Workmen Compensation Insurance - Customer Reviews
View all
Based on 92 reviews
out of 5
Based on 92 reviews
8 users
68 users
16 users
0 users
0 users
4.3 June 28, 2023
Positive Experience
Thank you, PolicyBazaar, for providing such a positive experience and ensuring that well-being of my employees and business!
4 June 18, 2023
Provides Financial Security
I purchased Workmen Compensation Insurance from PolicyBazaar for my business owner looking to secure their employees' welfare and protect their business interests.Thankyou. Worth buying.
3.8 June 08, 2023
Nice Purchase
I purchased Workmen compensation plan which turn out to be the good decision. Thanks PB.
4.3 May 26, 2023
Multiple Benefits
I recommend purchasing Workmen Compensation Insurance from Policybazaar. Their user-friendly platform, diverse policy options, exceptional customer support and efficient claims processing make them stand out from the competition.Thanks. It was a good decision.
4 May 21, 2023
Great Plan
I recently bought Workmen Compensation Plan at policybazaar website which provides comprehensive coverage giving me peace of mind knowing that my employees are well protected in case of any unfortunate event.Thanks.
3.8 May 16, 2023
Helpful Representatives
The team at PolicyBazaar were responsive, courteous, and extremely knowledgeable. I had a few questions regarding the coverage terms and the representatives were patient in addressing all my queries. Thanks.
4 May 11, 2023
Good Platformm
When it came to selcting the right Workmen Compensation Insurance, Policybazaar offered an impressive range of options from reputable insurers. I appreciated the comprehensive details avalable for each policy which helped me to take the better decisions. Thankyou.
3.8 May 06, 2023
Well Informed
I recently purchased Workmen Insurance plan from PolicyBazaar. The process was straightforward and I felt well-informed throughout, thanks to the clear and concise information provided.
4.3 May 01, 2023
Good Decision
I am absolutely delighted with the Workmen Compensation Insurance policy I purchased through Policybazaar. From start to finish, the entire experience has been nothing short of exceptional. I can confidently say that this is one of the best decisions I have made for my business.
3.8 April 30, 2023
Instant Protection Against Accidental Misshappening
I bought Workmen Compensation Plan from the Policy bazaar website online for our workers in my industry to get protetion aganst any Accidental miss happening caused to them. It offers amazing deals which provide them with medical coverage and help me to get instant protection against any loss. Thanks, PolicyBazaar.