Workers Compensation and Employers Liability Insurance

Every state has special laws that mandate immediate medical care for workers injured on
the job. Those laws also provide for financial compensation for the worker’s loss of
earnings due to those injuries, as well as recovery form occupational injuries sustained in
the workplace. If the injury is fatal, death benefits are provided for surviving spouse and
children. Occupational disease is also part of these laws, and workers are entitled to
compensation for disability due to those diseases.

All workers compensation legislation have five specific objectives:

  1. Prompt payment of adequate benefits to injured workers or their dependents
    according to fixed and predetermined schedules of benefits.
  2. Elimination of the costs of litigation to the employee, the employer and the society
    as a whole.
  3. Establishing a guaranteed benefits payment arrangement secured by “insurance”
  4. Promoting safety and health activities where the employer can easily observe the
    relationship between those activities and the costs of workers compensation
  5. Providing medical and rehabilitation services to injured workers.

If your customer owns, operates, or manages a business that employees, both you
and your customer need to be familiar with the workers comp laws of the states
where that injured operates.

The National Council on Compensation Insurance, Inc. (NCCI), developed the
Workers Compensation and Employers Liability Insurance Policy used in most
states. It covers the insured’s statutory liability under the various state workers
compensation laws, statutes and acts. It provides defined benefits to employees for
injuries sustained or diseases contracted arising out of and in the course of their
employment. Every state has laws requiring such protection for workers, and those
laws prescribe the amount and duration of the benefits provided. Employers
liability insurance covers the common law or tort liability of an employer for an
employee injuries that fall outside the scope of the state law or act that are separate
and distinguished from the liability imposed by workers compensation laws.

Workers compensation insurance provides the mandatory benefits prescribed and
required by the various state laws for accidental work-related injuries, diseases or
death that occur in the course of employment, subject to its terms and conditions. If
the injured worker alleges the injuries or disease were due to alleged negligence on
the part of the employer, employers liability insurance responds, subject to its
terms, conditions, limitations and exclusions.

The policy can be amended and customized by a number of available endorsements
that change or modify coverage, terms and conditions, in addition to exclusions.
Some of the endorsements are required in certain states because of the differences
in the workers compensation laws and statues of those individual states.