Workers’ Compensation and Employers’ Liability - 2 Types of Injuries Covered Illinois WC Benefits The WC and Employers Liability Policy Current WC Issues

Types of Injuries Fatal Permanent Total Permanent Partial Temporary Total Medical Only

Illinois WC Benefits State Average Weekly Wage (SAWW) = $ Average Weekly Wage (AWW) = (Earnings Over Last 52 Weeks – Overtime Pay)/52 Survivors’ Benefits Burial Benefit: $4, /3% of AWW w/ COLA Min Weekly Benefit: Lesser of $ or AWW Max Weekly Benefit: $1, Max Lifetime: Greater of $250,000 or 20yrs Remarriage “Award”: 2yrs Lump Sum w/o children

Illinois WC Benefits (continued) Permanent Total Disability 66 2/3% of AWW w/ COLA Min Weekly Benefit: Lesser of $ or AWW Max Weekly Benefit: $1, Max Lifetime: Unlimited Temporary Total Disability 66 2/3% of AWW 3 Workday waiting period/14 day retroactive period Min Weekly Benefit: Lesser of $113.40* or AWW Max Weekly Benefit: $1, *Assumes Married, 2 children

Illinois WC Benefits (continued) Permanent Partial Disability 60% of AWW Min Weekly Benefit: Lesser of $88.90* or AWW Max Weekly Benefit: $ or $1,051.99** Duration: Non-Schedule: % of disability * 500 wks Schedule: Thumb70 wks Hand 190 wks Foot155 wks Leg200 wks Hearing Both Ears 200 wks *Assumes Married, 2 children **$1, if amputation or enucleation occurs

Illinois WC Benefits: Example An employee is injured at work while performing his job duties. His medical bills are $400. His average weekly wage is $1,600. He is totally disabled for 13 calendar days (9 workdays). How much will paid by the company’s WC policy?

Illinois WC Benefits: Example 66 2/3% of his AWW = $1, Max benefit for TTD = $1, He will receive benefits for 6 workdays (9 workdays minus 3 day waiting period. 1.2 weeks * $1,051.99/week = $1, $400 for medical expenses TOTAL: $1,662.39

Illinois WC Benefits: Example An employee is injured at a company picnic where attendance is optional. Her medical bills are $200. She is able to return to work the next day. How much will paid by the company’s WC policy?

Where’s The WC Policy? In past lectures, insurance policies had Sublimits, Exclusions, Exceptions to Exclusions, etc. Basic WC policy has two coverages: Parts 1 & 3: State WC Coverage Part 2: Employers’ Liability The “Policy Language” for Parts 1 & 3 is in state WC statutes

Workers Compensation and Employers Liability Insurance Policy Information Page General Section Part One - Workers Compensation Insurance Part Two - Employers Liability Insurance Part Three - Other States Insurance Part Four - Your Duties if Injury Occurs Part Five - Premium Part Six - Conditions

Information Page 1 Describes insured 2 Shows coverage period 3 Summarizes coverages 4 Premium estimate Classification, estimated payroll, rate

General Section The Policy Who is Insured Workers Compensation Law State Locations

Part One - Workers Compensation A.How This Insurance Applies Bodily injury by accident must occur during the policy period Bodily injury by disease must be caused or aggravated by conditions of your employment. The employee’s last day of exposure to the conditions causing or aggravating such bodily injury must occur during the policy period. B. We Will Pay Benefits required by workers compensation law C. We Will Defend D. We Will Also Pay Insured’s expenses Bonds and interest on judgments

What is “Workers Compensation Law”? What WC Law is: –WC Law in each state listed in Item 3A –Any amendments to the law during the policy period What WC Law is not: –Federal WC Law –Federal occupational disease law –Any law that provides nonoccupational disability benefits

Part One - continued E. Other Insurance F. Payments You Must Make Payments in excess of regular benefits required because: Serious or willful misconduct Hiring an employee in violation of law Failure to comply with safety regulations Discharge, coerce or discriminate against employee G. Recovery From Others H. Statutory Provisions Your default or the bankruptcy or insolvency of you or your estate will not relieve us of our duties under this insurance after an injury occurs.

Part 2 -Employer Liability Insurance Need for coverage –Third-party-over suits –Care and loss of services –Consequential bodily injury –Dual capacity Exclusions –Outside the US or Canada –Liability assumed under contract –Punitive damages for illegally employed person –Bodily injury intentionally caused by insured –Damages from employment practices

Part 2 -Employer Liability Insurance Exclusions (Continued) –USLH & Extensions –FELA –Injuries to members of the crew of any vessel Limits of Liability –Basic Limits $100,000 – BI by Accident, Each Accident $100,000 – BI by Disease, Each Employee $500,000 – BI by Disease, Policy Limit –Increased limits can be obtained for additional premium –NY – Unlimited EL Coverage

WC and Employers’ Liability Policy Part 3 - Other States Insurance Part 4 - Duties If Injury Occurs Part 5 - Premium Recordkeeping requirements Adjusted premiums Part 6 - Conditions Inspection Assignment Cancellation

Current Issues Fraud Terrorism Exposure Assault on Exclusive Remedy California WC Reform