Canadian Accredited Insurance Broker (CAIB) Three Practice Exam

What option can an insured pursue to cover employee injury exposures?

1. Obtain additional commercial liability insurance

2. Purchase Employer's Liability coverage

3. Initiate a Workers' Compensation claim

4. Hire additional security personnel

The correct answer is: Purchase Employer's Liability coverage

Purchasing Employer's Liability coverage is an appropriate option to cover employee injury exposures because this type of insurance is specifically designed to protect employers against legal liability for work-related injuries or illnesses incurred by employees. While workers' compensation serves as the primary method for handling employee injuries in most jurisdictions, Employer's Liability coverage complements this system by providing protection in situations where an employee might sue the employer for negligence or other legal reasons related to their injury. This coverage can address gaps in workers' compensation policies, such as scenarios where the injury is outside of the scope of workers' compensation benefits. By having Employer's Liability coverage, employers can safeguard against significant financial losses associated with legal claims filed by employees. Other options, such as additional commercial liability insurance or hiring additional security personnel, do not specifically address employee injury exposures in the same manner. While initiating a Workers' Compensation claim is a necessary step after an injury occurs, it does not provide proactive coverage to mitigate legal liabilities arising from such incidents.