Workers Compensation

Part Five-Premium

This part of the workers compensation policy contains basic information regarding the calculation of the policy premium.

Part Six-Conditions

This part of the workers compensation policy contains several conditions, such as inspection, long-term policy, transfer of your rights and duties, cancellation, and sole representative.

Part One-Workers Compensation Insurance

This part of workers compensation insurance provides coverage for the statutory liability of the employer under the specified state statutes.

Experience Rating

a method of modifying employers' workers compensation premiums based on their own loss history.

Premium Discount

acknowledges that the expenses associated with writing an insurance policy increase at a decreasing rate as premium increases. The relative cost of issuing and servicing a policy, therefore, is smaller for policies generating large premiums than for those generating small premiums. Discounts are granted at a graduated rate as premium increases.

Elective Workers Compensation Laws

an employer has the choice of either accepting or rejecting the workers compensation law.

Compulsory Workers Compensation Laws

an employer must accept the law and pay workers compensation benefits, as specified by that state, to an injured employee who is covered under the law.

National Council on Compensation Insurance (NCCI)

angency that drafts the standard workers compensation and employers liability insurance form in most of the states.

3 Common Law Defenses Under Workers Compensation Laws

assumption of risk, contributory negligence, and negligence of a fellow employee.

Expense Constant

designed to cover administrative expenses, such as issuance, record keeping, and auditing, that are common to all workers compensation policies, regardless of the amount of premium generated.

Preliminary Unmodified Premium

determined by multiplying the appropriate rates by the premium basis (covered payroll divided by $100). Depending on the employer's size and the state of operation, some combination of additional factors must be applied to the unmodified premium to arrive at the estimated annual premium.

Workers Compensation and Employers Liability Policy

drafted by the National Council on Compensation Insurance (NCCI) and filed with most states on behalf of insurers.

Part Four-Your Duties If Injury Occurs

insured has the following duties: notify the insurer of the injury "at once," supply name and address of injureds/witnesses to insurer, give insurer all notices, demands, legal papers concerning claimant's suit, cooperate with insurer, do nothing after injury occurs that would interfere with insurer's right to recover from others, make no voluntary payments, assume no obligations, and incur no expenses, except at the insured's own expense, provide immediate medical attention and any other services that are required by workers compensation law.

Payroll

is the exposure base for workers compensation insurance. Is also used to determine an estimated premium at the beginning of the policy period. At policy expiration, the insured's actual payroll records are audited to determine the final premium.

Exclusive Remedy

means that an injured employee, generally, cannot sue an employer, for work related injuries if the employer has purchased workers' compensation insurance as required by law.

Part Two- Employers Liability Insurance

provides coverage for any liablility to an employee presented to the employer under common law. Applies in those few situations where the employee can elect not to come under the workers compensation statute.

Part Three-Other States Insurance

provides for statutory benefits when employees can press claims in states other than those where they are working.

Workers Compensation Insurance Rates

quoted per $100 of payroll and have traditionally been heavily regulated.

General Section

section of the workers compensation policy that establishes "you" the insured, and "us" or "we" the insurer. This section also establishes who is insured under the policy, what locations are covered, and the definitions of "workers compensation law" and "state."

Minimum Premium

the lowest premium required to issue a standard workers compensation policy for a period of 1 year. Required only in states that issue advisory rates.

Workers Compensation Policy

this standard form was drafted by the National Council on Compensation Insurance (NCCI) and filed with most states on behalf of insurers. It includes a general section, followed by 6 basic coverage parts, and an endorsements section.