Why is employers' liability insurance important for a factory owner?

Employers' liability insurance is particularly important for a factory owner because it is considered a statutory requirement in many jurisdictions. This means that there are legal regulations in place that mandate employers to have this type of insurance to cover their liabilities towards employees who may suffer work-related injuries or illnesses. The law requires employers to protect their workers by ensuring that they can provide compensation in the event of such claims.

Having this insurance not only fulfills legal obligations but also helps to safeguard the business against potential financial losses resulting from lawsuit settlements or compensation claims. It is a critical part of risk management for any business, especially in industries like manufacturing, where the potential for workplace accidents can be higher.

Regarding the other options, while common law may provide some basis for employee claims, the statutory requirement takes precedence as a formal legal obligation. Health and safety measures, although crucial, generally align with the need for the insurance rather than being a direct requirement for holding the policy. Trade unions may advocate for such insurance on behalf of workers but are not the governing body that mandates it, so this aspect is also not as directly relevant as the statutory requirement.