Important Definitions for Employers

WORKERS COMPENSATION BENEFITS income, medical, rehabilitation, death, and survivor payments to workers injured on the job.  State workers compensation laws, which date from early in the twentieth century. Provide that employers take responsibility for on the-job injuries.  Each state defines the benefit level for employers in that state.  Although these benefits were designated to be the final obligation of an employer to his employees, there have been considerable erosions of this concept since the early 1970s; workers have been allowed by the courts to sue employers for various on-the-job injuries in addition to workers compensation benefits.  Because workers compensation benefits are routine and fairly predictable risk, many employers use self-insurance.  Some states mandate that employers buy workers compensation insurance from a state fund, but some offer a choice of state fun, self-insurance, or commercial insurance

WORKERS COMENSATION, COVERAGE A agreement under which aninsurance company promises to pay all compensation and all benefits required of an insured employer under the workers compensation act of the state of states listed on the policy.

WORKERS COMPENSATION, COVERAGE B (Employment Liability) coverage under a Workers Compensation Policy for situations in which an employee not covered underWorkers Compensation law could sue for injuries suffered under common law liability.

WORKERS COMENSATION INSURANCE coverage providing four types of benefits (medical care, death, disability, rehabilitation) for employee job-related injuries or disease as a matter of right (without regard to fault).  This insurance is usually purchased by the employer from an insurance company although in a few states there are monopolistic state funds through which the insurance must be purchased.  The premium rate is based on percentage of the employer’s payroll and varies according to the employee’s occupation.

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