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PF&M at a Glance Workers compensation and employers liability insurance While some change is a constant in our modern lives, the insurance industry experiences a constant rapid pace of change, particularly with endless rate revisions and updated coverage forms. Fortunately, workers compensation coverage forms do not change as often because they are simply the means to implement the benefits prescribed by individual state workers compensation laws and statutes. Every state has special laws that mandate immediate medical care for workers injured on the job. Those laws also provide for financial compensation for the worker’s loss of earnings due to those injuries, as well as recovery from occupational injuries sustained in the workplace. If the injury is fatal, death benefits are provided for the surviving spouse and children. Occupational disease is also part of these laws, and workers are entitled to compensation for disability due to those diseases. All workers compensation legislation has five specific objectives: • Prompt payment of adequate benefits to injured workers or their dependents according to fixed and predetermined schedules of benefits • Elimination of the costs of litigation to the employee, the employer and society as a whole • Establishing a guaranteed benefits payment arrangement secured by “insurance” • Promoting safety and health activities where the employer can easily observe the relationship between those activities and the costs of workers compensation benefits • Providing medical and rehabilitation services to injured workers If your customer owns, operates or manages a business that has employees, both you and your customer need to be familiar with the workers comp laws of the states where that insured operates. The National Council on Compensation Insurance, Inc. (NCCI), developed the Workers Compensation and Employers Liability Insurance Policy used in most states. It covers the insured’s statutory liability under the various state workers compensation laws, statutes and acts. It provides defined benefits to employees for injuries sustained or diseases contracted arising out of and in the course of their employment. Every state has laws requiring such protection for workers, and those laws prescribe the amount and duration of the benefits provided. Employers liability insurance covers the common law or tort liability of an employer for employee injuries that fall outside the scope of the state law or act that are separate and distinguished from the liability imposed by workers compensation laws. Workers compensation insurance provides the mandatory benefits prescribed and required by the various state laws for accidental work-related injuries, diseases or death that occur in the course of employment, subject to its terms and conditions. If the injured worker alleges the injuries or disease were due to alleged negligence on the part of the employer, employers liability insurance responds, subject to its terms, conditions, limitations and exclusions. The policy can be amended and customized by a number of available endorsements that change or modify coverage, terms and conditions, in addition to exclusions. Some of the endorsements are required in certain states because of the differences in the workers compensation laws and statutes of those individual states. Please note that this is only a brief overview of the coverages available in this program. The PF&M Analysis from The Rough Notes Company, Inc., contains broader and more thorough discussions of these and other related subjects. Agency OnLine subscribers can refer to PF&M Section 280.4-2, Workers Compensation and Employers Liability Insurance Policy Coverage Analysis, for a detailed evaluation, discussion and additional information on this and related subjects. * |
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