What Is Workers’ Compensation Coverage B?
Workers’ Compensation Coverage B is an insurance policy designed to cover the costs associated with medical care, lost income, and rehabilitation for employees who suffer an injury on the job. It provides additional coverage when an employer is found liable for an employee’s injury.
Key Takeaways
- Workers’ Compensation Coverage B addresses costs related to medical care and lost income for injured employees.
- This additional coverage goes beyond what Part A (which meets state insurance requirements) provides.
- Most states mandate this insurance if an employer has three or more workers, including owners and uninsured subcontractors.
- Coverage can include 100% of medical expenses, partial lost wages (varying by state and policy), a lump sum for disability and disfigurement, and a death benefit.
How Workers’ Compensation Coverage B Works
Referred to as employers’ liability coverage, Workers’ Compensation Coverage B comes into play under federal and state statutes mandating employer-provided insurance. Part A meets basic state insurance requirements, while Part B covers additional liabilities.
Employers use this insurance to safeguard both their workforce and their business. The policy compensates employees for medical bills, related expenses, and lost wages resulting from a covered work-related incident. Payments are based on predetermined schedules for specified injuries, and expenses are calculated by adjusters.
Coverage limits include:
- Bodily injury by accident: $100,000 for each accident.
- Bodily injury by disease: $500,000 policy limit.
- Bodily injury by disease: $100,000 per employee.
By offering coverage for 100% of medical expenses, a percentage of lost wages (which varies by state and policy), a lump sum for disability and disfigurement, and a death benefit, Workers’ Compensation Coverage B ensures comprehensive protection for workers who suffer on-the-job injuries.
Special Considerations
Understanding the nuances of Workers’ Compensation Coverage is crucial. It is vital to ensure Part B employers’ liability features prominently in corporate umbrellas. Given the potential size of employer negligence claims, an umbrella policy can cover amounts exceeding a standard $1,000,000 primary limit.
For businesses in monopolistic states like Ohio, where Workers’ Compensation is state-provided, the employers’ liability often needs to be purchased from the general liability provider as an endorsement.
Inspiring Success: A Real-World Example
Consider an employee who spots a defective wire on a production machine and alerts their employer. If the employer fails to address the issue, and the employee suffers electrocution, employers’ liability under Part B would come into play. The policy would cover the claim up to the limit specified, beyond what Part A offers.
Employers’ liability payments often involve litigation and are triggered by injuries confirmed to be caused by employer negligence, underscoring the importance of having robust coverage in place.
Related Terms: Workers’ Compensation Coverage A, medical expenses insurance, disability insurance, death benefit, general liability insurance.
References
- Insurance Information Institute. “Insuring Your Business: Small Business Owners’ Guide to Insurance: Workers Compensation Insurance”.
- National Federation of Independent Business (NFIB). “Workers’ Compensation Laws - State by State Comparison”.
- Cornell Law School. “Legal Information Institute: Workers Compensation”.
- SFM Mutual Insurance Company. “What Are Employer Liability Limits”.
- Insurance Information Institute. “Should I Purchase an Umbrella Liability Policy”.
- Bureau of Workers’ Compensation, Ohio. “Ohio Workers’ Compensation and You”, Page 2.
