What Is Workers' Compensation Coverage B?
Let me explain Workers' Compensation Coverage B directly to you: it's an insurance policy that handles medical care, lost income, and rehabilitation costs for employees injured on the job. This coverage kicks in when the employer is liable, ensuring workers get the support they need.
Key Takeaways
You should know that Workers' Compensation Coverage B is designed to cover costs for medical care and lost income for injured workers. It's specifically for additional damages that exceed what Part A provides, which is the part that meets state insurance requirements. Most states require this coverage if an employer has three or more employees, and that includes owners of uninsured subcontractors and their employees. Under Part B, injured workers can receive 100% coverage for medical expenses, a state-varying percentage of lost wages, lump sums for disability and disfigurement, and even death benefits.
How Workers' Compensation Coverage B Works
Workers' Compensation Coverage B is often referred to as employers' liability coverage, and employers must provide it under state and federal laws to protect their employees. If you're a corporate insurance buyer, you get this to safeguard your workers and comply with state rules. Standard workers' compensation contracts have two parts: Part A meets state requirements, while Part B covers additional damages. The policy pays for employees' medical bills, related expenses, and lost wages in covered incidents. Payments follow predetermined schedules for defined injuries, or they're calculated by the adjuster as needed.
This coverage includes limits like $100,000 per accident for bodily injury by accident, $500,000 policy limit for bodily injury by disease, and $100,000 per employee for bodily injury by disease. As I mentioned, workers injured on the job get 100% medical coverage, a percentage of lost wages varying by state and policy, lump sums for disability and disfigurement, and death benefits. It's required in most states for companies with three or more employees, including uninsured subcontractors' owners and their staff for a year.
Special Considerations
When you're reviewing Workers' Compensation coverage, remember to ensure Part B employers' liability is properly scheduled on your corporate umbrella policy. Employer negligence claims can be substantial, so the umbrella often sits atop a $1,000,000 primary limit. If your business is in a monopolistic state like Ohio, where workers' comp is state-provided, you'll need to purchase employers' liability as an endorsement from your general liability provider.
Example of Workers’ Compensation Coverage B
Consider this scenario to understand how it applies: if an employee gets injured and there's potential employer negligence, Part B steps in to cover additional damages. These are usually litigated and triggered by serious injuries proven to result from negligence. For example, suppose an employee spots a faulty exposed wire on a machine and reports it to the employer, but the employer doesn't fix it, leading to the employee getting electrocuted. In that case, employers' liability under Part B would pay claims beyond the standard Part A amount, typically through a lawsuit filed by the employee or their family.
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