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RMI 4224 Chapter 12 NotesDevelopment of the System Common Law Relationship- Used to be only way to collect from an accident was to file a suit against the employer- Had to prove negligenceEmployer Obligations1. Provide reasonably safe work place2. Provide reasonably safe tools3. Provide competent fellow workers4. Set up safety rules and enforce them5. Warn the workers of any known dangers of the jobCommon Law Defenses1. Assumption of Riska. Injured person was aware of the danger and voluntarily exposed themselves tothe risk – can’t collect2. Contributory Negligence a. Employee contributed in any way to their own injury – can’t collect3. Fellow Servant Rulea. Employee injured by a negligent act of another employee is not the responsibility of the employerNo-fault Concept- Employers assumed cost of occupational injuries with no regard to who was at faultWorkers Compensation Act – 1910 – all 50 states1. CompulsoryEvery business (unless in Texas or New Jersey) must have workers compensation 2. Penalty for Failure to ComplyEmployer that fails to provide workers compensation is usually subject to a fine and possibly criminal prosecution 3. Exclusive RemedyWorkers compensation is the only remedy the employee hasCovered EmploymentsIndependent Contractorso Definition – one who undertakes an independent calling to provide work or service for another persono 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 InjuriesOutside 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 injury3. Horseplay – act of play that doesn’t further the employer’s business like an arm wrestling match4. Injury caused by the employee’s willful intention and attempt to injure them self(suicide attempt)5. Personal fight or battery6. Injury caused by employee’s willful failure to use a required safety deviceOccupational 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 bodyBenefits to Employee1. Medicala. Unlimited amounts of benefits subject to test of reasonable and necessary treatmentb. Rehabilitation may be included within this benefit2. Disability incomea. Greatest variance b. Goal is not to provide the full replacement of a worker’s salary or wagesc. Time limit varies with the average payment being 66 2/3 % of the worker’s average weekly salary d. Malingering 3. Death and survivor benefitsa. Financial support for those who do not receive the benefit of the deceased employee’s future earningsb. Income benefits are determined by the type of beneficiaryc. Spouse and children are primary beneficiaries 4. Rehabilitationa. Include both medical and physical rehabilitation which attempts to restore the injured worker to as close as possible to their previous physical conditionSecurity for Benefit Payments1. Private Insurancea. Employers provide workers compensation by purchasing a workers compensation and employers liability insurance policy2. State fundsa. Competitivei. Has replaced the assigned market risk planii. Competes with public marketplace b. Assigned Riski. Market of last resortc. Monopolistici. Include only basic workers compensation coverageii. Employers must purchase separate employers liability insuranceSelf-Insurance- Most states permit both individual self-insurance and group self-insurance- File with state and get approvedSecond Injury Fund- Pays a portion of a claim by an employee who has had previous injury and who suffers another injury1. Equitably allocate the costs of providing benefits in cases where injurycombines with a pre-existing condition2. Encourage hiring and retaining the physically handicappedWorkers 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 – ConditionsGeneral SectionNamed Insured – employer listed in item 1 of the information pagePolicy PeriodStates Covered- EL Limit- EndorsementsPremium InformationPolicy “covers”- Bodily Injury caused by accident or disease- We will pay/defendo Policy pays promptly when the benefits required under the workers compensation law are due from the employero Insurer promises to defend the insured against any claims seeking benefits payable under the workers compensation part of the policy- Other Insuranceo Insurer doesn’t pay more than its share of benefits and costs covered by workers comp insurance or self-insurance- Payments you must make1. Employer’s serious and willful misconduct2. Employer knowingly employs an employee in violation of the law3. Named insured fails to comply with health or safety laws or regulations4. Named insured discharges, coerces, or otherwise discriminates against any employee in violation if any workers comp law- Recovery from otherso Subrogation clauseo 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 provisionso Required by law1. Insurer has notice when the insured has notice2. Bankruptcy or insolvency doesn’t relieve the insurer of their duties3. Insurer is directly liable to any person entitled to the benefits payable by this insurance4. Jurisdiction over the insured is jurisdiction over the insurer5. Conforms to the parts of the workers compensation law that apply to:i. Benefits payable by insuranceii. Special taxes, payments to security or other special funds, and assessments payable by the insurer 6. The workers compensation law is primary over this contractEmployers Liability Insurance- Third-party claimso Made against the employer by others (third parties) who have been held liable for an employee injury- Care and loss of serviceso 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


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FSU RMI 4224 - Chapter 12

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