Most State laws require that every employer provide Workers Compensation insurance for their employees. This insurance provides coverage for accidents or disease arising from employment as prescribed by state law. Benefits can include lost wages, medical expenses, and permanent disfigurement/disability payments.
Major Components of Workers Compensation:
1. Workers Compensation - This section of the policy states that the policy will pay on behalf of the employer whatever benefits are due the injured employee under the workers compensation law of the state or states designated in the policy declarations. It does not specify the amount of benefits, since the laws change from time to time, so the policy merely says that it will pay whatever law currently requires. It will usually cover medical expenses, a limited amount of weekly loss of earnings, and some amount for death benefits to surviving dependents.
2. Employer's Liability - This protects the employer in the event the injuries of the employee are for some reason not compensable under the workers compensation act, or in the event that the injured worker or others can institute a claim for damages against the employer even though workers compensation benefits have also been paid.
3. Employer's Stop Gap Coverage - Insured's who are located in monopolistic states that do not include employer's liability in their workers compensation policies (some do-some don't) can instead purchase Employer's Liability Stop Gap Coverage as an endorsement to their general liability policy.
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