Workers Compensation

1
Workers Compensation Employers Liability
2
Workers Compensation History

• Industrial Revolution in US
• Social Conscious Awakening
• States acted independently
• Wisconsin 1911
• By 1920 all but a few states followed
• Today all 50 states plus
• Puerto Rico, Guam, DC, USVI Canada

3
Under Common Law

• Employers Duty of Care
• 1. Provide a safe workplace
• 2. Provide sufficient able employees
• 3. Provide safe tools and equipment
• 4. Warn of inherent dangers
• 5. Make enforce safety rules

4
Common Law Defenses

• Assumption of risk
• Contributory negligence
• Negligence of a fellow employee

5
Fundamental Principle

• Designed to protest workers and their families in
  connection with on-the-job injury, the Workers
  Compensation Statutes make a significant break
  from Common Law and the Employers Liability
  Statutes

6
Common Features Workers
Compensation Law

• Choice of Law
• Persons Employments Covered
• Injuries Diseases Covered
• Benefits Provided
• Methods of Financing Benefits
• Procedure for Obtaining Benefits
• Administration

7
Workers Compensation Law Principles

• Prompt payment of adequate benefits per state
  schedule
• Elimination of Legal Costs to Employees
• Guarantee of Benefit, Secured by Insurance
• Promotion of Industrial Safety Hygiene
• Payment for Medical Care Services and Lost Wages

8
Texas Comp. Benefits

• Medical Expenses Paid
• Lost Wages Indemnity Payments
• 70 of average weekly wage (75 if employee
  makes below 8.50 / hour)
• (Maximum weekly payment is 533)
• Note Employee must miss 7 full days before
  payments begin First 7 days are paid after the
  employee misses 4 weeks of work

9
Closer Look at Persons Covered

• Employees of the Insured
• Independent Contractors
• Temporary Employees
• Leased Employees
• Domestic Farm Workers

10
Benefits Provided

• Payments for Medical Services
• Rehabilitation Services
• Death Benefits
• Indemnity Payments (Lost Wages)

11
Methods of Financing Benefits

• Private Insurance
• Assigned Risk Plans
• State Funds
• a. Competitive State Funs
• b. Monopolistic State Funds
• Self-Insurance
• Excess Insurance

12
Third Party Claims

• If injured through the negligence of a third
  party e. g. someone other than their employer,
  the injured worker may
• 1. Sue the Third Party
• 2. Accept Work. Comp. and not File Suit
• 3. Accept Comp. and File Suit

13
Federal Compensation Laws

• Longshore Harbor Workers Act
• Defense Base Act
• Outer Continental Shelf Lands Act
• Nonappropriated Fund Inst. Act
• Jones Act
• Federal Employers Liability Act (RR)
• Agricultural Workers Protection Act
• Federal Employees Compensation Act

14
The WCEL Policy Form

• Part One Workers Compensation
• Part Two Employers Liability
• Part Three Other States Insurance
• Part Four Duties Upon Injury
• Part Five Premium
• Part Six - Conditions

15
Workers Compensation Part

• Pays statutory medical expenses and lost wages
• Accident must be during policy period
• Last exposure to disease must be during policy
  period
• No dollar limit for benefits (set by state
  statute)
• No exclusions stated

16
Additional Costs Paid by Work Comp

• Expenses incurred at carriers request
• Release from attachment appeal bonds
• Litigation and defense costs
• Judgment interest
• The insurance companys expenses

17
Insured Repays the Carrier When

• Serious and Willful Misconduct
• Knowingly Hires In Violation of Law
• Fails To Comply With Safety-Health Law
• Wrongful Discharge/Discrimination

18
Other Factors

• The carrier can subrogate or seek legal remedy
  from any negligent third party on behalf of the
  worker
• The carrier pays directly to the worker or the
  workers survivors
• The insurance will pay even if the employer fails
  to comply with policy requirements
• The Comp Law is part of the policy

19
Suits Against The Employer

• Filed When
• 1. Gross Negligence
• 2. Loss of Consortium
• 3. Consequential Bodily Injury
• 4. Dual Capacity
• 5. Excluded Employees
• 6. Third Party Brings In Employer
• 7. Employer Has Assumed Liability
• (handled under CGL Contractual)

20
Employers Liability Exclusions

• Statutory Obligations
• Injury Outside US or Canada
• Contractual
• Punitive Damages
• Injury to Illegal Employees
• Intentional Acts
• Employment Practices-Discrimination
• Fines Penalties

21
Employers Liability Limits

• Bodily Injury By Accident
• Bodily Injury By Disease
• (Policy Limit)
• Bodily Injury By Disease (Each
  Employee)

22
Insurance in Other States

• The injured employee can choose benefits in
  either the state of hire or the state in which
  injury occurred
• All states of operation should be listed
• Item 3A Known Operations
• Item 3C - Potential Operations
• Most states offer an All States Endorsement for
  additional premium

23
Duties If Injury Occurs

• Promptly notify the carrier
• Cooperate with the carrier (attend hearings,
  trials, secure witnesses,etc.)
• Do not voluntarily pay medical expenses (except
  immediate first aid)

24
Premium Calculations

• Charges based on payroll by job classification
• Estimated payrolls used to begin policy
• Carrier audits payroll records at end of policy
  and makes premium adjustment
• Corrections to classifications may be made at
  time of audit

25
Conditions

• Inspection
• Long Term Policy
• Assignment
• Cancellation
• Sole Representative

26
Endorsements

• Voluntary Compensation
• Foreign Voluntary Compensation
• LHWCA or USLH Act
• Maritime Coverage2
• Other Federal Statutes1