Workers Compensation is one of the most common and critical insurance coverages for NJ Business Owners. The coverage is mandatory and it is the only coverage that will pay for benefits mandated by NJ State Workers Comp statutes.
“Remember that your policy is subject to audit. At the end of your policy term the insurance company will determine the actual cost of your policy. Do NOT underestimate payroll to save $$$”
Workers Comp policies have two parts -
Coverage “A”: Workers Compensation
This coverage part pays:
- Medical Expenses For On The Job Injury
- Loss of Income up to the statutory amount
- Partial Disability or
- Permanent Disability
- Legal Expenses associated with a disputed claim
There are Workers Comp Courts that hear disputes between an injured worker and the insurance carrier
Coverage “B”: Employers Liability
Workers Comp is meant to be an ‘Exclusive Remedy” for job related injuries. Recently however, injured employees have been able to go outside the Workers Comp remedy and sue employers or others in civil court for damages. Employers Liability is where you get insurance coverage for this type of claim.
Once scenario that has seen some litigation recently is where an employee hurt on a job will sue not the employer, but a 3rd party that is alleged to been negligent. That 3rd party then brings the action back to the employer for reimbursement. Again, Employers Liability is where coverage is found.
Most insurance companies will offer limits as high as $1,000,000 for this section, and you should certainly buy the high limits.
CAUTION: Be sure that every state you have employment in is listed on your policy as a covered state – if not… you just may find yourself with an uninsured claim.