Workers Compensation and Employers Liability Flashcards
Five Employer Common Law Obligations (5)
SSSSW (5)
(employees have to prove failing of one)
○ Safe place to work
○ Safe tools
○ Sober / Competent fellow employees
○ Safety rules established and enforced
- Warn workers of any known dangers
3 Employer Common Law Defenses
○ Assumption of risk
○ Contributory negligence
○ Fellow-servant rule (fellow employee rule)
- Negligence of co-worker caused accident, not the employer
Historical purpose of Workers Comp (3)
Common law didn’t pay for injured employees family or spouses
Employers were winning most of the cases
Public pressure to create WC Law (statutes) to supersede but not eliminate common laws
Purposes of Current WC Law (5)
(shit haPPENS)
Predictable cost
Prompt and reasonable payment of benefits
Exclusive or Sole Remedy
Negligence no longer basis for determining liability or recovery
Safety promoted
Prompt and reasonable payment of benefits (5 benefits)
Statutory benefits
Benefits are partial and final
AOE / COE
§ Arising out of employment
§ Course of Employment
“injury”
“Occupational Disease”
Compulsory vs. Elective States - 2 Elective States
Texas and NJ
3 Common Funding Methods to Comply with WC Law
Private Carriers
State Funds
Self Insured where permitted
4 Monopolistic States and How to add EL to them 3
NOWW (North Dakota, Ohio, Washington, Wyoming)
Add EL via endt, separate policy or stop gap to GL
Penalties for Non-Compliance
I C FIME
Cease work orders
Fines
Misdemeanors
Imprisonment
Injured employees can sue
Employer loses common defense
4 Employer Statuses
Primary or direct Employer
○ Traditional employer / employee relation
○ Employer directly hires
○ Obligated to provide WC
De facto Employer
○ Employers that classify employees differently but in reality are responsible for providing benefits
Statutory or de jure employer
○ State specific classification of employees (or lack of)
General / Regular Employer and Special Employers
○ Employee leasing companies
○ When state silent, special employer required to provide
- Can customize with contracts
Exemptions to WC Law (2)
Numeric Exemptions (some states)
§ Employee count less than a certain amount in certain states and certain industries
General Exemptions for Certain Types of Employees
General Exemptions for Certain (7) Types of Employees
CAR VIDS
Casual laborers
□ Hired workers for work not typically related to the business
Agricultural or farm workers
□ Depending on payroll, full vs part time, pay level, family member, # of workers, migrant or seasonal
Real estate salespersons
Voluntary Compensation and EL
□ Voluntarily bringing in these exempt employees
Independent Contractors, Volunteer workers and leased employees may or may not
Domestic employees (housekeepers, nannies)
Specific positions
□ Sole proprietors and partners
□ Executive officers typically employees
□ Opt out / Opt in Rules
General Exemption for who is employee (Employee vs independent 1 / Common Law 2 / Volunteer Workers 1 / Leased workers 3)
Employee vs independent
® Sometimes defined in WC statute
Common law
® Revert to this when statutes silent
® IRS criteria
Volunteer workers
® Typically not covered but can be specified in states such as volunteer firemen
Leased Workers
® Parties in leasing agreement
® Can define in contract
® Typically client company is employer
- Alternate employer endt
The Information Page (4 Sections of it)
1- Insured
2- Policy Period
3- Activation of Coverage
4- Classifications, payrolls and premium
Info Page - 3- Activation of Coverage (A 2/ B 2/ C 3 )
A: Part one WC Insurance
§ List all states insured operates or expects to
§ Cannot List monopolistic
B: Part Two EL Insurance
§ Applies only for states listed in 3a
§ Limits
□ BI by Accident each accident
□ BI by disease policy limit
□ BI by disease each employee
C: Part 3 Other States Insurance
§ Activates WC and EL for states after effective date
§ States must be listed
- All states except NOWW and those in 3a
WC Insurance - How insurance applies (2)
Applies to BI by accident or disease including death
§ BI accident must be during policy period
- BI disease must be caused or aggravated by employment conditions
Four Categories of Benefits as required by WC Law
(Medical, Compensation, Rehab, Death)
Medical Benefits
Compensation for Lost Wages
○ 4 Types
§ Permanent partial
§ Temporary partial
§ Temporary total
§ Permanent total
○ Varies by state in amount, length and waiting period
Rehabilitation benefits
○ Sometimes under medical benefits
○ Restore to max physical capacity
Death or survivorship benefits
○ Burial
○ Income benefits to dependents
Payments the Insured must make (3 law breaks and one more)
Excess of benefits because of the insured’s (Misconduct, illegal hiring, safety violation, other laws)
§ Serious and willful misconduct
§ Knowingly employed an employee in violation of law
§ Failure to comply with health or safety law
- Discharge, coercion, or discrimination against an employee in violation of law
WC - Recovery From Others (Right to ___ /Protect rights of …. /when must happen)
Right to subrogate
Insured must protect these rights of CO
Waived rights must happen before loss
EL - Insurance Company’s Promise to Pay (what they pay/ cause/ and 4 types of claims)
Sums insured legally must pay for damages
Because of BI to employee
4 types of claims (where permitted by law)
Third Party Over
- Lawsuits filed by a third party seeking recovery from the insured because it was held liable for an insured’s employee’s injury
Care and Loss of Services
§ Lawsuits from employee spouse or children for loss of services from injury
§ Services include sexual, companionship, help in performing chores, etc.
Consequential Bodily Injury
§ Disease or injury to family member as consequence of employee injury
Dual Capacity claims
- Injury of employee that happened when employer operating in a different capacity as just an employer
Third Party Over - EL vs CGL Which ones responds? (EL 1 / GL 1)
EL
® Excludes Liability assumed under contract; HOWEVER, EL provides coverage if 3rd party claim filed on basis of tort (negligence).
® Example: Employee sues third party that was negligent but third party sues employer claiming they’re negligent
CGL
® Excludes EL, but not liability assumed under insured contract
- Example: Third party sues on basis of contractual liability qualifying as an insured contract
EL - Exclusions (13)
IF FEW FIB C MIP (If a few fib it’s cause of an MIP) (All F’s are related to federal laws)
Illegally hired employees with knowledge of employer
Federal Law Acts that work is subject to
Federal Employers’ Liability Act where work is subject to it
Employment‐related practices
WC or similar law - Any obligation under
Fines and penalties imposed for violation of federal or state law
Intentional injury caused by NI
Bodily injury to masters or crew members of any vessel *
Contractual Liability
Migrant and Seasonal Agricultural Worker Protection Act where damages are payable under it
Injury outside US, territories / possessions and Canada
○ Exclusion for employees on temp work assignments
Punitive or exemplary damages
Other States insurance - How this Insurance Applies (5) (States listed in …. / Must begin after… / Who’s reimbursed/ how many days to notify?
Coverage Applies to
§ States listed in 3c
§ Must begin work in state after effective date
□ If before then it should be in 3a
§ Reimburse NI if insurance is not allowed to pay benefits directly to employee
§ 30 days to notify CO of operations existing on effective date not in 3a
- Insured to notify CO AT ONCE if work begins in state in 3c
Potential Coverage Issues with Part 3 - Other States Insurance (4)
30 days notice can be an issue
Reliance on item 3c to provide automatic coverage
Notifying company at once can be issue
Some carriers aren’t registered in all states
Jurisdictional statutes when Out of State employee injured varies (5) (All of these injuries covered /
○ All in-state injuries covered
○ Excludes injuries to transients if coverage available in other states and the other states grant reciprocity
○ Completely bars recovery
○ Some states are silent
- Law leaves decision to courts
EL - Part Four – Your Duties If Injury Occurs (6)
(SIN CIN)
- Immediate medical and other services
- Information on injury - provide it
- Notices, demands, and legal papers to be sent to CO
- Cooperate
- Subrogation rights not to be interfered with
- No voluntary payments or incurring expense
Part 5 Premium - Our Manuals (7)
(PARRC MF)
Premium Payments
Audits
Records
Remuneration
Classifications based on estimated exposures
Manuals Determine Premium
Final Premium
EL - Part Six – Conditions
(CLITS)
Cancellation
Long Term policy
Inspection
Transfer of your rights and duties
Sole rep
Maritime Coverage Endt (3)
EL for claims brought against employer due to BI to crew of vessel
Must occur in operation of vessel between ports of US, Alaska, Hawaii or Canada
No coverage for transportation, wages, maintenance, and cure unless a premiums shown on the endorsement Schedule
-If purchased, excludes punitive damages related to duty or obligation to provide these
Longshoremen And Harbor Workers Compensation Act Coverage Endorsement (LHWCA) (4 - Where applies / who applies to / who doesn’t provide to/ coverage)
Provides both WC Insurance and EL Insurance for work subject to the LHWCA
Covers traditional maritime occupations (Longshore workers, ship repairers, shipbuilders, harbor construction)
Injuries must occur on water or adjoining areas (ports)
Does not apply to crew of vessel
Foreign Workers Compensation and Employers Liability Endorsement (2 main coverages of it / 3 limitations)
Repatriation expenses
- Cost to bring injured or dead employee back to US
Endemic diseases
§ Disease prevalent to a region
Limitations
§ Must be hired in US
§ Only covers temp assignments <90 days
- Pays only statutory benefits of designated state(s)
