Workers Compensation

Prior to 1990s when employees had to sue what were the 5 common law obligations

1. Providing a reasonable safe place to work

2. Providing reasonable safe tools

3. Assuring Compentent employees (safe and sober)

4. Establishing and enforcing safety rules

5. Warning Workers of any Known Dangers

only employee could sue, family could not

What are the common law defenses raised by an employer

1. Assumption of risk (knew it was dangerous and did it anyway)

2. Contributory Negligence (if you had fault in your injury)

3. Fellow-Servant Rule (if injury due to another employee)

What are the 5 purposes of current common law obligations

1. Negligence is no longer a basis for determing liability or recovery - no fault

2. Provides for prompt and reasonable payment of benefits

   1. status may require a payment within a certain amount of days

   2. benefits are primary partial and final

   3. employee injury or disease must airise out of employment

   4. W/C describe what type of injuries are compensable

3. Establishes Exclusive or Sole Remedy

   1. provides protection for employees from tort actions

   2. protects employers from additional exposure

   3. protections extends to co workers that might have caused the injury

   4. there are some extensions state by state that will allow employees to sue

4. Employers gain predictablity for the cost of providing workers comp

5. Encourages loss prevention and encourages safety

What are the two main parts of workers compensation?

1. Broad protection for the company from liability for injuries to employees within the scope of employment

2. Others who may have a claim aganist the company for an employees injury

What is a quick summary of what worker compensation is?

• state laws

• each state has a different workers compensation statue

  • who/how many (domestic workers no, 0-3 employees)

• can elect self insurance but most dont

What are the two states with elective workers compensation laws?

Texas and New Jersey

Where is workers compensation purchased from?

What are the monopolistic states?

1. Private insurance companies

2. State Funds (either competitive/monopolistic)

3. Where self insurance is allowed

• Ohio

• Washington

• Wyoming

• North Dakota

What are the penalities an employer could face for not following workers compensation laws?

1. Cease work orders

2. Fines

3. Mideamenors

4. Imprisonment

5. Injured employers are allowed to sue employer if not following W/C for benefits

6. Employer losses common law defenses

How does NO Fault relate to workers compensation?

an employee could be injured by the action of an employer, another employee, or own action and still covered

How does Full and Final Settlement work for workers compensation

the amount paid is not contestable

• employees try to file outside of W/C & scope of employment to be able to sue employer

• employer attempts to keep everything as W/C because there is limit to recovery

What are the four common exceptions for workers comp coverage?

1. Domestic Employees

2. Agricultural and Farm Workers

3. Real Estate Salespeople

4. Casual Laborers

Business owners exempt

What are the common legal disputes of workers comp?

1. Deviating from employee (stop for gas, depends how far the deviation was)

2. Coming/Going from Work (most cases not except..)

   1. employee provided transportation to work

   2. employee has no fixed place of work

   3. sent on specific mission

   4. furthering business another way

3. Horseplay

4. Company sponsored events (requirement to participate)

5. Working from Home (as long as furthering business)

6. Travel (entire of trip)

7. Fighting (over work issue)

8. Intentional Acts

9. Intoxication

How are employees defined per state law?

1. Primary or Direct

traditional employees hired and paid by employer

2. De Facto

not a direct employee but not a contractor (should be covered)

3. Statutory

statue requiring the employer to cover for them

4. Regular or General

rented or leased employees, should be covered under leasing workers comp policy

How are benefits set up in workers comp policies?

benefits set by a statue in the state

• Employee is not allowed to appeal benefits

Benefits Payable under W/C

1. Medical Payments

unlimited coverage for medical treatments

2. Disability benefits

66% of pre injury income (income replacement)

1. Permanent, total disability

2. Temporary, total disability

3. Permanent, partial disability

4. Temporary, partial disability

(partial calculate difference bef/aft comp)

3. Rehabilitation Benefits

Unlimited benefits

4. Death Benefit

Set amount determined by the state

What happens if a company is operating in more than one state?

All states be listed in the workers compensation policies

What does the workers compensation policy outline?

1. Who is an insured? only employer

named insured is the only insured on policy

2. Coverage - only listed states

3. Limits of Insurance - limits by accidents & disease do not apply to W/C (def by state)

4. Premium - Premium proactively rated with annual premium

What are the 8 parts of the workers compensation insuring aggrement?

1. Application of the insurance

any type of injury that is considered W/C (must occur during policy period) policy for last exposure in affect if long term injury

2. Payment

policy will pay whatever is req of workers comp laws in affect of state without limitation

3. Defense

Workers Comp provide defense

4. Additional Payments

   1. pay reasonable expenses

   2. premium for release attachment and bonds

   3. litigation cost

   4. any expense insured incurs

5. Other insurance

W/C will pay partial, or 100% of remaining

6. Payments the Named Insured Must Make or Exclusions

• payment due to employer misconduct

• employer hires injured employee in violation

• employer fail to comply with safety laws

• insured discriminates for W/C

7. Recovery from Others (subrogation)

8. Statutory Provisions

   1. if named insured knows injury- insured needs too

   2. bankruptcy not change expectations

   3. insured holds primary liability for injury

   4. jurisdiction over named also over company

   5. policy conform to W/C laws

all above relates to what section of the workers comp laws?

injuries that happen during the scope of employment

What are the following part listed as section?

Employer Liability

when a loss occurs directly connected to a loss from an injury to an employee that is covered under workers comp

• family claiming loss of income to care for family member with a injury due to employment

2. What is section A of Employer Liability?

Section A - How the Insurance Applies

Be directly related to a workers compensation injury

1. Bodily injury to the employee must arise out of and in course of employment of the injured employee by the named insured company

2. Employment of the injured employee must have been necessary in the covg territory

3. Bodily injury must have occured during policy period

4. Injury caused by employment

5. lawsuit for damages must be brought to US

2. What is section B of employer liability?

Section B - What the policy will pay?

Pay all damages due to bodily injury

1. Any damages in which company is liable to a third party

2. Any damages for care or loss of service due to Workers Comp

3. Consequential loss to family directly related to W/C injury

4. Damages aganist insured company

2. What is section C of employer liability?

Section C - Exclusions

1. Any liability assumed by contract is not covered

2. Punitive or Exemplary Damages

3. Employees employed in violation of law

4. Any obligation imposed by workers comp or similar law

5. Bodily injured intentional caused or aggrevated by the named insured

6. Bodily injury that occurs outside of the coverage territory

7. Damages airising out of employment actions

8. Bodily injury to any person or subject to federal laws

9. Bodily injury subject to Federal employee liability act

10. bodily injury to master or any crew of vessel

11. fines or penalities assed for violation of state law

12. Damages payable under migrant and seasonal agricultural laws

any worker that is covered under a federal law policy is excluded or if coverage is under another policy also excluded

2. What is section D of employer liability?

Section D - Defense

Legal defense provided by the insurance company

2. What is section E of the insurance policy?

Section E - Additional payments

additions to limit of insurance

1. Reasonable expenses incurred by the insurance company at the req of the insurance company

2. Release attachment bonds and other bonds

3. Any litigation cost aganist the insured

4. Interest on judgement up to the time the insurance company offers the amount of settlement or lawsuit

5. Any expenses the insurance company incurs

2. What is the limit of insurance for employer liability?

Section G- Limit of insurance

3 limit all apply to Employer Liability

1. Maximum policy will pay for each accident

2. Maximum policy will pay for an injury caused by a disease

2. What is section F?

Section F - other insurance (W/C share and then pay 100%)

2. What is section H?

H - Recovery from Others

2. What is section I?

Section I - Actions Against the Insurance Company

Insured may only sue under Employer Liability IF

1. Insured has compiled with all terms of the policy

2. Amount owed under the policy is determined by insurance company