Four Ways Workers Compensation Insurance Differs from Other Insurance

Workers’ compensation insurance has no time limits.

1. No annual or per-claim limits. Most insurance policies have annual and (sometimes) per-claim limits. After the policy pays out its maximum amounts, the insured must pay the difference out of pocket. With workers’ compensation, you might pay a per-claim deductible, but after the claim exceeds the deductible, you will have no additional out-of-pocket costs. Why is that?
   A workers’ compensation policy specifically covers the benefits state law requires an employer to pay an injured worker. So no matter how much you owe an injured worker in lost time and/or medical benefits, the policy will pay.
2. No time limits. Your workers’ compensation policy will cover an injured worker for his/her entire life. If an injury that occurred during your employ recurs or needs further treatment, your policy will cover it…regardless of how long it’s been since the injury occurred.
3. Your coverage never becomes outdated. Unlike other business insurance coverages, which can have limits that are too low for your current needs or fail to cover important risk exposures, you do not need to update your workers’ compensation policy whenever the law changes. Because your policy covers all legitimate workers’ compensation claims filed by your covered employees, it automatically covers any benefit increases or additional benefits that state law requires you to pay.
4. It’s no-fault. The so-called “exclusive remedy” makes workers’ compensation one of the first types of no-fault insurance. Under the exclusive remedy doctrine, an employee gives up the right to sue the employer for any workplace injuries in exchange for guaranteed coverage under state workers’ compensation law. This minimizes conflict, saves time, reduces legal costs and guarantees coverage for all workers with legitimate workplace injuries.

Keep in mind that workers’ compensation policies are state-specific. If you have employees in more than one state or who spend significant amounts of work time in another state, please ask us for more information on your coverage options. In addition, workers’ compensation laws don’t apply to all employees, including contract employees. Employer’s liability coverage can help fill this coverage gap.