General Information on Workers
Compensation Claims
Many big
insurers shy away from offering Workers' Compensation insurance to
small businesses. Not InsuranceFirst Services.
While the
coverage included in any Workers' Compensation policy is largely
mandated by state statute, FirstInsurance Services distinguishes its
policy by going beyond those requirements to expand coverage in
several key areas. Better yet, we complement those expanded
coverages with exceptional claims handling and a variety of cost
containment services.
What Is
Workers' Compensation -- And Workers' Compensation Insurance
In general, the
current Workers' Compensation system represents a compromise between
employers and employees regarding employment-related injuries or
illnesses. Basically, employees relinquish their right to sue
employers if they suffer some job-related injury or illness. In
return, employers agree to provide state-mandated benefits if such
injuries or illnesses occur.
To ensure
employers will have the money to pay these mandated benefits, most
states require that employers demonstrate that they have the
financial ability to pay any claims that may arise. Typically, this
financial ability is demonstrated through the purchase of Workers'
Compensation insurance.
Most Workers'
Compensation insurance policies actually provide two types of
coverage:
-
Workers' Compensation Coverage. Pure
Workers' Compensation coverage provides benefits for injured
workers as required by state law --
regardless of who is at fault for the
injury or illness. In other words, whatever benefits your state
requires that employers provide for injured workers, your
Workers' Compensation policy provides.
-
Employer's Liability Coverage. This
additional coverage provides employers with liability protection
in case they are ever sued for damages arising from
employment-related accidents or diseases. However, to collect
benefits provided by Employer's Liability Coverage, both the
employee as well as anyone else not covered by workers'
compensation laws (i.e. spouses and dependents), would have to
prove that the employer was actually legally responsible for the
employee's injury or disease.
Who This
Policy Will Cover?
In general,
Workers' Compensation insurance is designed to provide benefits for
your employees. However, the individuals that are defined as
employees are determined by state law. And in Workers' Compensation
cases, courts have typically been very liberal in their definition
of employees, so as to provide injured workers with broad protection
under the state's Workers' Compensation laws.
The Employer's
Liability insurance included in your Workers' Compensation policy
can also provide damages to injured workers separate from their
Workers' Compensation benefits. Family members and other third party
claimants may also receive benefits under this coverage -- if they
prove the employer's legal liability.
What
Expenses This Policy May Pay?
Typically, your
Workers' Compensation policy will pay for:
-
Medical benefits for a covered injury
or disease -- including medical, hospital, surgical and other
related health care costs as well as physical therapy and
prosthetic devices
-
Disability income benefits - including
compensation for lost wages
-
Rehabilitation benefits - including
services to help an injured worker return to productive work,
such as vocational rehabilitation
-
Death benefits - including a flat
amount for burial expenses as well as partial replacement of the
worker's weekly wage.
What
Protection This Policy Offers?
Work-Related Injuries
If one of your
employees is accidentally injured while on the job, your Workers'
Compensation policy will pay for a wide range of services to aid the
injured worker's recovery and return to productive work. These
services can include the cost of medical care, compensation for lost
wages, and rehabilitation therapy.
If your employee
is accidentally killed while on the job, your policy will also
provide death benefits -- including burial expenses and partial
replacement of the worker's weekly wage.
Occupational
Illnesses
If some
condition in your working environment actually causes one of your
employees to become ill or contract a work-related disease, your
Workers' Compensation policy will provide a wide range of benefits
to help treat this illness and speed the employee's recovery. These
benefits will typically cover the cost of medical care, compensation
for lost wages, and other required therapy.
If your employee
dies from this disease, your policy will also provide death benefits
-- including burial expenses and partial replacement of the worker's
weekly wage.
Coverage for
Employees Not Subject to Workers' Compensation Laws
Most Workers'
Compensation policies only provide benefits for those employees your
state specifically identifies as subject to workers' compensation
laws. But some policies goes beyond this requirement. It
automatically extends bodily injury coverage to employees who aren't
expressly covered by your state's Workers' Compensation laws -- such
as volunteers.
Liability
Suits Related to an Employee Injury
To recover
benefits under your state's Workers' Compensation law, your
employees don't have to prove you were somehow responsible for their
employment-related accident or disease. But if they can prove you
were liable for their accident or illness, they may be able to
successfully sue to recover damages beyond the Workers' Compensation
benefits.
If so, you'll be
comforted to know that the Employer's Liability portion of your
Workers' Compensation policy can pay for the damages awarded to your
injured employee -- as well as the legal expenses involved in such a
suit. This coverage may also provide certain benefits if you are
ever sued by a third party affected by a workplace injury, such as a
family member of the injured worker.
Expenses You
Incur as Part of a Workers' Compensation Claim
If you are ever
involved in a Workers' Compensation claim, proceeding, or suit, most
Workers' Compensation policies will pay for any reasonable expenses
you incur at our request to participate in these proceedings or help
prepare your defense. In fact, we'll even pay for any earnings you
lose because of these activities -- a benefit most standard Workers'
Compensation policies do not offer.
Legal
Expenses in Workers' Compensation Cases
If you are
protected by Workers' Compensation policy, you generally won't have
to worry about bearing any legal expenses related to a Workers'
Compensation or Employer's Liability claim. In fact, we will assume
the responsibility of investigating, defending and settling any
related claims, proceedings or suits. We will also supply the
services of an attorney to represent you in any such suit. In short,
we will:
- Pay the
cost of defending you in any hearings, suits, etc, that result
from any occurrences covered by Workers' Compensation; and
- Pay damages
if you are successfully sued because of a job-related injury or
disease.
Compensation
for Family Members
If an injured
worker's family members can prove that you were legally liable for a
work-related injury or illness, they may be able to collect damages
from you. In such cases, the Employer's Liability coverage provided
by your policy may pay for:
-
compensation for family members for their "loss of consortium"
or access to the injured worker; and
- damages for
injuries to spouses or relatives that result from the injury to
the spouse or relative.
Coverages for
Employees While Traveling on Business
Most Workers'
Compensation policies only provide coverage for the states in which
you do business, as specified in your actual policy. Therefore,
check your policy if it extends its Workers' Compensation coverage
to employees traveling outside the standard policy territory
(excluding U.S., Canada, Cuba, Iran, Iraq, Kampuchea, North Korea,
Libya, and Lebanon).
Accidents
Over Navigable Waterways
If any of your
employees ever have an accident while carrying out their job
responsibilities over a navigable waterway, they may be subject to
the workers' compensation benefits provided by the United States
Longshore and Harbor Workers Compensation Act. Typically, benefits
mandated by this act are more extensive than those provided under a
state's Workers' Compensation law.
Employer's
Liability in Monopolistic States (NV, OH, WA, WV, WY)
In six states,
the state governments mandate that employers purchase Workers'
Compensation insurance from the state fund. Referred to as
"monopolistic states", these states don't even allow insurance
companies to sell Workers' Compensation to employers headquartered
within their borders.
Even if your
business isn't domiciled in one of these states, you could still be
affected by their laws. If one of your employees is injured in any
of these states and decides to file a Workers' Compensation claim,
that state's laws would apply. In such a situation, you'll be
reassured to know that most Workers Compensation policies
automatically provide "employer's liability" coverage. This coverage
would pay for related expenses and damages in case you are ever sued
for the employment-related injury or illness. Other insurers may
offer this extended coverage in these states -- but only if you
specifically request that they add it to your policy.
Third Party
Suits Against the Employer
If your
employees are injured in an accident, they may try to sue a "third
party" (a company other than yours) -- if they believe that party is
somehow responsible for their injury. In turn, that third party may
sue you -- if it believes your company is legally liable for the
accident.
For example, an
employee injured while using a piece of equipment may sue the
equipment manufacturer for some alleged negligence or faulty design.
However, the manufacturer can then turn around and sue your company
-- if they believe the accident was instead caused by your improper
maintenance of the equipment.
In this
situation, the Employer's Liability coverage of your policy would
pay any damages awarded by the court to compensate for the bodily
injury.
Failure to
Notify Insurer of Potential Hazards
When you apply
for a Workers' Compensation policy, you have an obligation to
disclose to the insurer all known hazards. But what if you don't
even know you have a potential hazard at your business site? Unlike
other policies, our Workers' Compensation policy explicitly
states that we won't deny coverage if something happens as a result
of that undisclosed hazard -- as long as you did not intentionally
fail to notify us of its existence.
Investigation
into Workers' Compensation Fraud
Unfortunately,
fraudulent claims add to every employer's workers' compensation
costs. And since most insurance companies are serious about helping
you control costs, we're serious about fighting fraud. Our claim
professionals can also coach you on how to spot and handle a
potentially fraudulent claim.
