Workers’ Compensation, Coverage B
Definition
Workers’ Compensation, Coverage B, also known as Employers’ Liability Insurance, is part of a commercial Workers’ Compensation Policy designed to protect employers against claims not covered under standard Workers’ Compensation laws. This coverage steps in when an employee can sue their employer for injuries under common-law liability. It typically addresses claims related to negligence by the employer or third-party overaction, including pain and suffering, loss of consortium, and punitive damages.
Examples
- Negligence Claims: An employee sues their employer claiming the latter neglected to maintain a safe workplace, resulting in a severe injury.
- Consequential Bodily Injury: A family member of an employee sues the employer for emotional or physical injuries suffered due to the initial worker’s injury.
- Dual Capacity Claims: An employee is injured by a product manufactured by their employer and subsequently sues the employer in the capacity of a manufacturer.
- Third-Party Overaction Claims: An injured employee sues a third party (e.g., a contractor) who then files a lawsuit against the employer for their contribution to the injury.
Frequently Asked Questions (FAQ)
Q1: What is the main difference between Workers’ Compensation and Coverage B?
A1: Workers’ Compensation provides direct benefits to employees for work-related injuries, while Coverage B protects employers against lawsuits from employees for negligence or other claims under common-law liability.
Q2: Is Coverage B mandatory for all employers?
A2: The requirement for Coverage B varies by jurisdiction. While it is often included in standard Workers’ Compensation policies, its necessity depends on state laws and the specifics of the workplace.
Q3: What are common exclusions in Coverage B?
A3: Common exclusions can include intentional acts by the employer, illegal employment practices, and claims based on contracts.
Q4: How does Coverage B benefit employers?
A4: It mitigates the financial risk associated with lawsuits stemming from employee injuries that fall outside the scope of standard Workers’ Compensation, protecting the business’s financial stability.
Q5: Can Coverage B limit the amount an employer might have to pay in a lawsuit?
A5: Yes, Coverage B typically includes policy limits that cap the amount the insurance will pay, often including both maximum payouts per occurrence and aggregate limits.
Related Terms
- Workers’ Compensation: Insurance providing wage replacement and medical benefits to employees injured in the course of employment.
- Employers’ Liability Insurance: Another term for Workers’ Compensation, Coverage B; protects employers from claims not covered under statutory workers’ comp.
- Common-Law Liability: Legal responsibilities determined through court decisions rather than written laws.
- Negligence: Failure to take proper care in doing something, resulting in damage or injury to another.
- Loss of Consortium: Damages claimed by a spouse or family member of an injured person for loss of companionship and support.
- Third-Party Overaction Claim: A claim where an injured employee sues a third party, who then sues the employer for their contribution to the injury.
Online References
- U.S. Department of Labor - Workers’ Compensation
- National Council on Compensation Insurance (NCCI)
- Insurance Information Institute
Suggested Books for Further Studies
- “Workers’ Compensation Law: A Context and Practice Casebook” by Michael C. Duff
- “Workers’ Compensation Law (Hornbook)” by Arthur Larson
- “Understanding Workers’ Compensation Insurance” by Henn Haase
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