Most people think of workers’ compensation as one policy, but there are actual two parts, and each has limits.
Part A is the workers’ compensation part of the program. This provides compensation to the worker who is hurt or made ill as a result of their job. Part B gives liability coverage to the employer. This part provides the company with protection if the worker thinks the employer was negligent or reckless and chooses to file a lawsuit rather than claim workers’ compensation.
There is no exact limit for Part A coverage. The amount that is paid to the injured worker is determined by the Workers’ Compensation Board in every state. When deciding how much the worker should get in compensation, the Board will consider the worker’s salary each week and how serious the injury is.
For instance, if the worker in New York earns a salary each week of $500, is hurt and 100% disabled, the benefit would be ⅔ of the average weekly salary, subject to a maximum determined by the state. Workers’ compensation also pays medical bills for disease treatment and injury rehabilitation.
For Part B coverage, there are set limits. The basic limits are $100,000 per event for bodily injury, $100,000 per employee for a disease, and $500,000 policy limit for bodily injury caused by disease. These limits are in effect for all states, except ND, OH, WA and WY.
Because one or two large workers’ comp claims can exhaust the limits of the company’s liability, employers should buy more liability coverage. The added premium for boosting limits is quite small when compared to the protection provided.