Parts of a workers' compensation policy

Helping Californians Choose Workers' Compensation Insurance

Parts of a workers' compensation policy:

Usually a workers comp policy has two parts: Part One, Workers Compensation and Part Two, Employers’ Liability.

Under Part One, the insurer contracts to pay whatever the state-required amounts of compensation may be. Unlike other types of insurance, the workers comp coverage has no ceiling on the policy amount. The insurance company accepts a transfer of the employer’s entire statutory obligation—whatever the employer is legally obligated to pay as a result of the injury.

Part Two of the policy provides coverage for an employer who is sued by an employee for work-related bodily injury or illness that isn’t subject to state statutory benefits. It has a monetary limit.

Employers' liability also insures an employer in some other situations. One is so-called “third-party over suits,” where an injured worker files suit against someone other than the employer (a third party) and that third party then seeks to hold the employer responsible. For example, an employee injured while working with a machine might file suit against the manufacturer of the machine. The manufacturer might then sue the employer claiming that the cause of the injury was modifications the employer made to the machine or improper use. Another situation where this liability coverage applies is when the spouse of an injured worker sues the employer for loss of consortium.

_______________________________________________________

Integrity in Action
About the California State Insurance Fund

Post your question
Post your Workers' Compensation related question. Get answered by the experts!

_______________________________________________________