Used to be only way to collect from an accident was to file a suit against the RMI 4224 Chapter 12 Notes Development of the System Common Law Relationship employer Had to prove negligence Employer Obligations 1 Provide reasonably safe work place 2 Provide reasonably safe tools 3 Provide competent fellow workers 4 Set up safety rules and enforce them 5 Warn the workers of any known dangers of the job Common Law Defenses 1 Assumption of Risk a Injured person was aware of the danger and voluntarily exposed themselves to the risk can t collect 2 Contributory Negligence 3 Fellow Servant Rule a Employee contributed in any way to their own injury can t collect a Employee injured by a negligent act of another employee is not the responsibility of the employer No fault Concept Employers assumed cost of occupational injuries with no regard to who was at Workers Compensation Act 1910 all 50 states fault 1 Compulsory Every business unless in Texas or New Jersey must have workers compensation 2 Penalty for Failure to Comply Employer that fails to provide workers compensation is usually subject to a fine and possibly criminal prosecution 3 Exclusive Remedy Covered Employments Independent Contractors Workers compensation is the only remedy the employee has o Definition one who undertakes an independent calling to provide work or service for another person o Doesn t include agricultural workers or pro athletes 1 Who is control of the method of work The person for whom the work is completed for determines the acceptability of quality and whether or not the completed work meets the agreed upon specifications 2 Who has control of the person s time number of hours number of days and the final completion date Covered Injuries Outside the scope of employment 1 Act of God exposure to some natural phenomenon like a tornado 2 Intoxication normally required to be the proximate cause of injury 3 Horseplay act of play that doesn t further the employer s business like an 4 arm wrestling match Injury caused by the employee s willful intention and attempt to injure them self suicide attempt 5 Personal fight or battery 6 Injury caused by employee s willful failure to use a required safety device Occupational Diseases Fastest growing area of workers compensation claims Definition disease arising out of and in the course of employment which causes damage or physical harm to the body Benefits to Employee 1 Medical a Unlimited amounts of benefits subject to test of reasonable and necessary treatment 2 Disability income b Rehabilitation may be included within this benefit a Greatest variance b Goal is not to provide the full replacement of a worker s salary or wages c Time limit varies with the average payment being 66 2 3 of the worker s average weekly salary d Malingering 3 Death and survivor benefits a Financial support for those who do not receive the benefit of the deceased employee s future earnings Income benefits are determined by the type of beneficiary b c Spouse and children are primary beneficiaries 4 Rehabilitation a Include both medical and physical rehabilitation which attempts to restore the injured worker to as close as possible to their previous physical condition Security for Benefit Payments 1 Private Insurance 2 State funds a Competitive a Employers provide workers compensation by purchasing a workers compensation and employers liability insurance policy i Has replaced the assigned market risk plan ii Competes with public marketplace b Assigned Risk i Market of last resort c Monopolistic i ii Employers must purchase separate employers liability insurance Include only basic workers compensation coverage Self Insurance Second Injury Fund Most states permit both individual self insurance and group self insurance File with state and get approved Pays a portion of a claim by an employee who has had previous injury and who suffers another injury 1 Equitably allocate the costs of providing benefits in cases where injury combines with a pre existing condition 2 Encourage hiring and retaining the physically handicapped Workers Comp Policy General Section Part 1 Workers Comp Policy Part 2 Employer Liability Part 3 Other States Insurance Part 4 Duties Part 5 Premium Part 6 Conditions General Section Named Insured employer listed in item 1 of the information page Policy Period States Covered EL Limit Endorsements Premium Information Policy covers Bodily Injury caused by accident or disease We will pay defend o Policy pays promptly when the benefits required under the workers compensation law are due from the employer o Insurer promises to defend the insured against any claims seeking benefits payable under the workers compensation part of the policy Other Insurance o Insurer doesn t pay more than its share of benefits and costs covered by workers comp insurance or self insurance Payments you must make 1 Employer s serious and willful misconduct 2 Employer knowingly employs an employee in violation of the law 3 Named insured fails to comply with health or safety laws or regulations 4 Named insured discharges coerces or otherwise discriminates against any employee in violation if any workers comp law Recovery from others o Subrogation clause o Insurer has the employer s rights of persons entitled to the benefits of this insurance to recover payments from anyone liable for the injury Statutory provisions o Required by law 1 Insurer has notice when the insured has notice 2 Bankruptcy or insolvency doesn t relieve the insurer of their duties 3 Insurer is directly liable to any person entitled to the benefits payable by this insurance 4 Jurisdiction over the insured is jurisdiction over the insurer 5 Conforms to the parts of the workers compensation law that apply to i ii Benefits payable by insurance Special taxes payments to security or other special funds and assessments payable by the insurer 6 The workers compensation law is primary over this contract Employers Liability Insurance Third party claims for an employee injury Care and loss of services o Made against the employer by others third parties who have been held liable o Loss of consortium claims that are brought by the injured employee s spouse cooking childcare cleaning society companionship and sexual relations Consequential bodily injury o Ex Spouse learns her husband had a work related injury and suffers a heart attack then files a suit against the employer Dual capacity Exclusions o Occurs when employee is injured o Employer is sued in a