Covered Expenses

• A workers' compensation policy generally will pay for injuries suffered by an employee while on the job. It includes medical expenses (including first aid), temporary disability, permanent disability, vocational rehabilitation, supplemental job displacement benefits and death benefits. An injured employee may qualify for more than one of these benefits.
  
  

Liability Coverage

• Though generally workers' compensation losses are considered "no fault" and laws exist to protect businesses from lawsuits by their employees due to injuries, insurance policies often carry a liability portion in addition to the injury coverage. Situations do exist where a business may become involved in legal trouble as a result of these injuries, and the liability covers such expenses.
  
  

Limits

• Typically there is no maximum dollar amount placed on workers' compensation claims. In other words, the insurance carrier would be responsible for all the covered expenses with no limit. The liability benefit will be subject to whatever maximum is defined by the policy, typically set at $1 million. As always, insurance companies reserve the right to mitigate the cost of a claim within legal parameters.
  
  

Rates

• Premium is determined as a percentage of payroll amounts, and the rate charged varies depending on the occupation being insured. For example, clerical staff will be charged a much smaller premium than construction workers, due to the increased risk of working on a construction site as compared to an office setting. For every $100 in wages paid to the employee, a certain dollar amount is charged for premium.
  
  

Audits

• Because premium is calculated based on payroll, the premium will increase along with payroll costs. Each year (on average), the insurance company will perform a payroll audit, comparing the expected payroll to the actual amount, and issuing a refund or additional invoice for the differences between premium earned and premium paid.