Chapter 15: Workers' Compensation Insurance

3 Factors used to determine if injury occurred during course of employment:

*Time: injury must occur during the time work is actually being performed for employment *Place: injury must occur at the place of employment *Circumstances: injury is compensable if away from the place of employment if employment duties are being performed.

Types of Disability:

1. Permanent Total 2. Permanent Partial 3. Temporary Total 4. Temporary Partial

Funding

5 ways for funding workers' comp benefits. Each state requires employers to elect at least one of these methods: 1. Private Insurance 2. Monopolistic States 3. Competitive States 4. Self-Insurance 5. Individual Employer Groups

Benefits Provided:

Disability/Loss of Income Benefits Medical Benefits Survivor/Death Benefits Rehabilitation Benefits

Voluntary Compensation

Endorsement may be added to the policy, which provides coverage for excluded workers such as domestic employees and farm workers.

Compensable Injuries

Injuries must occur in the course of employment.

Federal Employers Liability Act (FELA)

Interstate railroad workers are covered under this law instead of state workers comp laws. Allows injured workers or a rep of a deceased worker to sue the employer for negligence. Removes the common law defenses of contributory negligence and assumption of risk.

General Section contains:

Part 1: Workers' Comp Part 2: Employer's Liability Part 3: Other States Ins Part 4: Your Duties If Injury Occurs Part 5: Premium Part 6: Conditions

Industrially Disabled:

Refers to the Individuals loss of earnings.

Competitive States

Some states have created competitive state funds that allow employers to choose between purchasing Workers' comp ins from a state fund or a private ins co. Private insurers are allowed to compete with the state.

Individual Employer Group

States that allow individual employers to form groups typically require the employers to be in the same business or have a minimum amount of workers comp premium.

Part 2: Employer's Liability

This part covers the insured for amounts the insured becomes legally liable for under common law bc of work-related injury or occupational disease. A $100k minimum limit per accident applies Per employee limit of $100k for disease with a $500k an overall policy limit for additional claims.

Part 1: Workers' Comp

This part guarantees to pay all comp and other benefits required of the insured by the workers comp law in the states where the insured's business operates. The states that are listed in the info page. No $ limit applies, except for those limited by law. Coverage applies to any work-related accident occurring during the policy period

Part 3: Other States

This part may be used to extend coverage for states that are not specifically listed in the Info page for Part 1 cov. The state must be listed in the info page under part 2, other states cov, and the insured must provide notice to the insurer if the insured begins work in another state.

Medically Disabled:

This refers to the physical condition that affects functioning

Part 5: Premium

This section explains how the premiums of the policy are determined.

Part 4: Your Duties If Injury Occurs

This section explains the insured's duties if an injury occurs for which there may be coverage. The insured must provide medical services required for the injured party, report the injury to the insurer, and assist the insurer in the investigation and settlement of the claim.

Part 6: Conditions

This section explains the various conditions that apply to the policy. Cancellation procedures, subrogation, and the insurer's right to inspect the insured's workplace are some of the conditions addressed.

Self-Insurance

When the employer assumes all workers' comp liability by self-insuring. The employer sets up a fund to pay workers' comp claims. The employer files evidence of its existence with the states workers comp authority. The employer is responsible for benefit costs, claim expenses, and medical and legal services.

The Federal longshore and Harbor Workers comp Act

covers certain types of employees. Take priority over any state law that may cover the same workers. Provides for specific benefits that must be paid to maritime employees who are injured while working on navigable waters or shore-site areas of the US and its territories.

Workers' Compensation Laws

designed to provide a fair method of handling work-related injuries and occupational diseases. -Based on the belief that employers should pay the cost most work-related injuries and occupational diseases, no matter who is at fault. -Cost to the employer would be passed onto the consumer as a production cost. -Workers are not allowed to file suit against their employers in an attempt to acquire further comp.

Private Insurance

employer purchases workers' comp ins from a private insurer. Ins co pays benefits as required by law.

Monopolistic States

employers are required to purchase workers' comp ins from the state if they want to the insured against Workers Comp claims. The state does not allow private insurers to compete against the funds.

Longshore and Harbor Workers Comp Act Coverage

endorsement must be attached to the policy for coverage to be provided.

Compulsory

the employer is required to comply with all provisions of the law.

Elective

the employer may choose not to be subject to the law. If employer chooses this, employer is denied any rights provided under the law regarding employee claims.