Workers Comp – What is it?

Explanation of Work Comp Coverage.

If you have ever reviewed your workers compensation policy, you will note that Part I, Workers Compensation, applies to the laws of the State and does not specify a limit. This is because workers compensation applies to “benefits.” Workers compensation benefits are determined by the state, so coverage is virtually unlimited.

However, Part II, Employers Liability, does have a limit shown on the policy. EL applies to damages that the insured must pay, much like a general liability policy and hence, is subject to the limits shown.

Basically, EL is intended to protect an employer from legal liability arising out of employee injury, which is not covered by the workers compensation policy. Although coverage applies to all employer’s liability claims not specifically excluded, the policy does list the four most common types of claims: