Colorado Property & Casualty Practice Exam 2025 – Complete Preparation Guide

Employers Liability coverage is designed to provide protection for employers from claims made by employees for work-related injuries or illnesses that are not covered by workers' compensation insurance. One key aspect of this coverage is its limitation concerning bodily injury by accident per employee.

The reason this choice is correct lies in the nature of the coverage provided. Employers Liability typically includes limits on the amount that can be claimed by an employee for a bodily injury resulting from an accident. This limit is implemented to manage risk and liability exposure for employers, ensuring that claims are handled within a specified financial framework. By having this limitation in place, employers can better assess their financial risks regarding potential employee injuries, allowing them to maintain liability coverage without facing potentially unlimited financial consequences.

This particular limitation is important because it safeguards both the employer and the employees by ensuring that there are predetermined maximum amounts for which the employer might be held liable in the event of an employee’s claim. It helps establish clear boundaries for claims, assisting in loss control and risk management strategies for businesses.