Risk Solutions for Workers’ Compensation

Understanding your workers’ compensation

As a business owner, you know that accidents happen on the job unexpectedly — resulting in your business being held liable to compensate your employee for any damages incurred. Workers’ Compensation Insurance enables you to manage the risk of accidents on the job.

Workers’ Compensation Insurance covers:

• Employee medical expenses and wages lost from injury
• Employer’s liability insurance protects you from lawsuits by your own employees
• Mandates initiated by certain states
• Work-related illness and injury

Typically, a workers' compensation policy is written in two parts: “Part One – Workers Compensation” and “Part Two – Employers Liability.”

Under Part One, the insurance carrier provides coverage for whatever the state-required amounts of compensation may be. Each state determines features such as:

• The number of benefits to which an employee is entitled
• How impairments are to be evaluated
• How care is to be delivered
• How claims are to be handled
• How disputes are to be resolved

Unlike many other types of insurance, workers' compensation coverage has no ceiling or limit on the policy amount. The insurance provider accepts the statutory obligation of whatever the employer is legally obligated to pay because of the injury.

Part Two of the policy provides coverage for an employer who is sued by an employee for work-related bodily injury or illness that isn’t subject to the state statutory benefits.

Examples include:

• Third-party Over Suit: An injured worker files suit against someone other than their employer, and that third party then seeks to hold the employer responsible.
• Loss of Consortium: The spouse or family member of an injured worker sues the employer because of their significant other’s injuries