Unit 20: Workers Compensation

Who is at fault in the worker’s compensation policy? Additionally, who is covered?

The employer is ALWAYS at fault.

Employees are covered at portion of their typical wages. Employee does NOT pay deductibles.

Common Law Defenses Used

-Assumption of Risk: employee knew the risk.

-Contributory Negligence: employee was partly at fault.

-Fellow Servant rule: injury was caused by another employee.

What benefits are included in workers comp?

-medical.

-disability.

-survivor (if employee dies).

-Burial costs (if employee dies).

-Rehabilitation- physical, occupational.

Excludes: pain and suffering, horseplay= anything outside of job description.

Note: employee is subject to drug/alcohol testing.

How does an employee become eligible for workers comp?

-Time: during work time, performing tasks for employer.

-Place: on premises or away from premises while duties are being completed for an employer (ex: electrician).

-Circumstances: were duties/tasks related to work?

What types of physical liability are covered?

-Bodily injury.

-Disease: must be caused by a specific environment.

• (ex: coal miners= black lung)

State laws: Compulsory versus Elective. Define.

-Compulsory: state must adhere to worker’s comp laws.

-Elective: optional adherence. If an employer does not have workers comp, they CANNOT use the 3 common defenses.

What are the (5) different types of funding?

-Private Workers Comp: insurance- private insurers.

-Monopolistic State Funds: state only provides.

-Competitive State Funds: private vs. state option.

-Self-insurance: employer can self-insure. No policy.

• must prove that employer has money set aside in case claim arises.

-Groups: employers from the same business form groups to ensure together.

Who files workers comp claims?

The National Council on Competitive Insurance (NCCI)

What are the (5) sections of a policy? What does the general section of the workers’ comp include?

-Section 1: General: what 6 parts of coverage are.

-Section 2: Employers liability.

Other:

-Duties if injury occurs.

-Premium calculation.

-Conditions.

What are the 6 parts of workers comp?

Part 1: workers comp insurance- no dollar limit.

Part 2: Employers liability: BI- per accident.

Part 3: Other states- those listed on dec. page.

• (ex: Brian travels to TX, Kaplan covers even though he lives in MI. If injured in TX, TX injury laws apply b/c that’s where he got injured).

Part 4: Your duties if injury occurs.

Part 5: Premium.

Part 6: Conditions- subrogation, inspection, cancellation.

What exclusions are included for Part 2?

Liability assumed under contract, injury covered under federal workers comp, and injury to master/member/crew of vessel.

Endorsements

Voluntary Compensation Endorsement: covers employees who are typically excluded/exempt from employee comp.

(ex: domestic employees, farm workers, volunteer workers).

How is premium computed?

• Job class (/) $100 annual payroll applicable to class (x) book rate deposit premium.

• ^ how the Initial Premium Deposit is determined.

-Final Premium adjusted: based on audit

-Experience rating: what the final premium adjustment is based on.

• Compares the insureds to other insured in the same industry

  • Better= decrease premium (Experience Modification factor).

  • Worse=increase premium (Experience Modification factor).

What are the Federal Compensation types?

-Longshore and Harbor Worker’s Comp Act of 1927: injuries that occur regarding dock/boat.

-Federal Employment Liability ACT (FELA): injuries to railroad workers (“I’ve been working on the railroad fella”).

-Jones Act (Merchant Marine Act): injuries to the ship’s crew/captain away from the dock.