Insurance
Workers Compensation
Workers compensation is a no-fault insurance system that provides medical benefits, disability income, and death benefits to employees injured on the job, while protecting employers from lawsuits.
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Exam Tip
WC is NO-FAULT. Coverage A = unlimited statutory. Coverage B = $100K/$500K/$100K. Exclusive remedy!
What is Workers Compensation?
Workers compensation is a mandatory, no-fault insurance system that provides benefits to employees who suffer work-related injuries or illnesses. In exchange, employees give up the right to sue their employers for negligence.
The Grand Bargain
| Employees Get | Employers Get |
|---|---|
| Guaranteed benefits | Immunity from lawsuits |
| No need to prove fault | Predictable costs |
| Quick payment | Protection from large verdicts |
| Medical + wage coverage | Limited liability |
Coverage Parts
| Part | Coverage |
|---|---|
| Coverage A | Workers Comp - statutory benefits |
| Coverage B | Employers Liability - lawsuits |
Coverage A Benefits (Statutory)
| Benefit Type | What It Provides |
|---|---|
| Medical | All reasonable treatment costs |
| Disability | Wage replacement (usually 66⅔%) |
| Death | Funeral costs + survivor benefits |
| Rehabilitation | Vocational retraining |
Disability Types
| Type | Description |
|---|---|
| Temporary Total | Can't work at all, will recover |
| Temporary Partial | Can work some, will recover |
| Permanent Partial | Some permanent impairment |
| Permanent Total | Can never work again |
Employers Liability (Coverage B)
Standard limits: $100,000 / $500,000 / $100,000
- Per accident
- Per disease (policy limit)
- Per disease (per employee)
Key Features
| Feature | Description |
|---|---|
| No-Fault | Employee doesn't need to prove employer negligence |
| Exclusive Remedy | Generally can't sue employer |
| Mandatory | Required in almost all states |
| Experience Rating | Premiums based on claims history |
Common Exclusions
- Intentional self-inflicted injuries
- Injuries while intoxicated (drugs/alcohol)
- Injuries from fighting (if aggressor)
- Injuries to independent contractors
- Covered by other workers comp (subcontractors)
Exam Alert
Workers comp is NO-FAULT and provides EXCLUSIVE REMEDY. Coverage A is unlimited (statutory). Coverage B protects against lawsuits that fall outside the exclusive remedy.