In addition to being your reliable source for finding a Workers’ Compensation partner for your business needs, at Direct WorkComp, we also believe that understanding how and where your coverage exists is important. For this entry in our “101” blog series, we’re exploring three essential aspects of Workers’ Comp plans: 

1. Employee Coverage – Part 3A
2. Damage Recovery Protection – Part 3B 
3. Applicable Coverage States – Part 3C

Part 3A: Employee Coverage

The heart of any Workers’ Comp plan is the coverage provided for employees who experience bodily injury on the job, whether by accident or disease. When reviewing your plan, check Part 3A for the specific types of coverage provided, if coverage extends to business owners (which can be elected) and the states in which the coverage applies. Common information found in this section include:

• Medical expenses such as emergency room costs, chiropractic care, ongoing physical therapy and/or continued physician appointments.
• Prescription drug coverage for anything deemed necessary as ordered by the medical provider.
• Compensation recovery for the employee’s lost wages until they can safely return to work.
• Travel expenses related to medical appointments, including mileage and any other related fees (e.g., parking costs.)
• Funeral expenses for work-related injuries resulting in death.
• Permanent disability for injuries resulting in permanent damage that no amount of surgery or physical therapy can reverse. In this case, a medical professional assigns an impairment rating monetary awards are based on. 
• Ongoing costs of care that an injured worker affected by a lifelong injury may require.

Part 3B: Damage Recovery Protection

Another important part of Workers’ Comp insurance is protecting your business in the event you are sued for a workplace injury. While not extremely common, these claims, also known as “third party over action”, typically involve a third party attempting to recover damages. Part 3B of a Workers’ Comp policy focuses on the coverage provided and claim limits for an employer or business. The language for these limits might look like:

• Bodily Injury by Accident – $X00,000 for each accident.
• Bodily Injury by Disease – $X00,000 total policy limit.
• Bodily Injury by Disease – $X00,000 each accident.

A third party over action could be instigated by a subtractor that is insured and their company wants to recover their own Workers’ Comp payments, by third parties that were sued by your employees for something related to the incident, or by someone related to the injured employee who has been indirectly affected by the employee’s workplace injury.

Examples:

• Multiple contractors working on a construction site with shared equipment, and an employee of another company is injured by a piece of equipment owned by yours. Since they must now pay out a Workers’ Comp claim, they could sue you to recover damages. 
• A loose lighting fixture falls and injures an office employee. In addition to their Workers’ Comp claim with your business, the employee also sues the property manager for not properly maintaining the building. Per the lease, your business is contractually obligated to indemnify the property manager for any claims brought by your employees.
• A spouse who now must care for their partner due to significant injury at work sues for personal hardships resulting from their partner’s injury.

Part 3C: Other States in Which Your Coverage Applies   

As we discussed in our blog about filing a claim, the state your business operates in can heavily impact your Workers’ Comp policy. While part 3A lists the main state(s) in which you operate and your Workers’ Comp policy exists, Part 3C details any other state(s) your policy extends to and exclusions that apply. The lack of an “other states endorsement” can indicate that employees in other states won’t be covered if you begin conducting business elsewhere. 

Example: an employee travels to another state for a conference and is injured. Without an ‘other states endorsement’ in the policy, a Workers’ Comp claim may be denied.

Part 3C of a robust Workers’ Comp policy will include language like:

“Part 3C of the policy applies to the states listed here:  

• • All states except ND, OH, WA, WY.
  • States listed in Part 3A.”

Additionally, North Dakota, Ohio, Washington and Wyoming are considered monopolistic states, meaning if your company has operations in those states, you must purchase a policy from the state itself, and your current insurance coverage will not be applicable there.

Worker’s Comp Coverage: Keeping an Eye on the Details

All in all, understanding your Workers’ Comp coverage is an essential part of selecting the right plan for your business. Direct WorkComp is here to help – get coverage today with quick and easy quotes!