Insurance Terms - Workers Compensation
DISCLAIMER -
The abbreviated outlines of coverage provided in this site are not intended to
express any legal opinion as to the nature of insurance coverage. The terms
shown on this site provide only the most basic and general description of some
common terms used by the insurance industry. Please read your policy for
specific details of your coverage. ONLY your policy provides coverage.
Workers Compensation Insurance
This coverage agreement obligates the insurer to pay all compensation and other
benefits required of the insured by the workers compensation law or
occupational disease law of any state listed in the policy. The coverage
applies to bodily injury by accident and by disease.
Coverage (A) shows no dollar limit for the benefits provided since any
applicable limits would be those established within the law of the State your
coverage applies. Benefits under coverage (A) are paid to the employee without
regard to fault.
Employers Liability
This coverage protects employers for their legal liability for bodily injury by
accident or disease to an employee arising out of and in the course of the
employee's employment when not covered under the workers compensation law.
Before benefits are paid under this coverage, the employee must prove the
employer is liable for the injury. Limits shown are the base limits. Options
include $100,000/$500,000/$100,000, $500,000/$500,000/$500,000 &
$1,000,000/ $1,000,000/$1,000,000. The example below uses the lowest limits.
Bodily Injury By Accident
This amount is the most an insurer will pay under coverage (B) for all claims
arising from any one accident, regardless of how many employees are involved in
the accident. The standard limit is $100,000 for any one accident, which can be
increased.
Bodily Injury By Disease (Policy Limit)
This is the aggregate limit the insurer will pay under coverage (B) for all
claims sustaining bodily injury by disease during the policy period. The
standard policy limit is $500,000, which can be increased.
Bodily Injury By Disease (Each Employee)
This amount is the most an insurer will pay under coverage (B) for damages due
to bodily injury by disease to any one employee. The standard limit of
liability for each employee is $100,000, which can be increased.
Other States Insurance
This provides workers compensation coverage if the insured expands operations
into other states not declared at the time the policy is issued or renewed. If
the insured elects this coverage and operations begin in a state listed under
other states, the insurer provides the same coverage as if the state was
declared in the policy at the time of policy issuance.
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Voluntary Compensation Endorsement
Workers compensation laws of most states exempt some types of employment from
workers compensation benefits. This endorsement amends the standard policy to
provide coverage for employees with exempted occupations from the workers
compensation act. When the endorsement is added it does not make employees
subject to the workers compensation law, but it obligates the insurance company
to pay on behalf of the insured, an amount equal to the compensation benefits
that would be payable to those employees if they were subject to the workers
compensation law of that state.
This is a federal act which is similar to the state workers compensation act.
The federal act was designed to provide workers compensation benefits to
employees who work in maritime employment upon the navigable waters of the
Executive Officers, Partners Exclusion
Endorsement
In some states, workers compensation law allows an insured to include or
exclude Executive Officers and Partners, or both, from coverage. Adding this
endorsement can designate the individuals not covered under the policy.
Experience Modification
This is a factor that deals with the rating of the policy. The Experience
Modification figure is based on the insured's individual loss experience as
compared to the insured’s industry as a whole. The factor is used to increase
or decrease the manual rates of insurance.
Monopolistic States
There are six states that require all workers compensation insurance to be
placed with their state fund. No private insurer is allowed to write Workers
Compensation Coverage in the six states. The states are
Waiver of Subrogation
This endorsement disallows an insurance carrier from seeking refund for their cost of injury to an employee covered under workers’ compensation. If the actions of you or your employees cause injury to someone covered under workers’ compensation, that insurance carrier can seek recovery (subrogate) against you for their cost of paying the workers’ compensation claims.