Workers compensation is the system by which no-fault statutory benefits prescribed in state law are provided by an employer to an employee or an employee’s family because of a job-related injury (including death) resulting from an accident or occupational disease.
Originally this system was designed under the rationale that the employee, if injured on the job, would be guaranteed payment from their employer for lost wages and medical costs in return for not suing the company. However, in recent developments, new legal practices have not prevented employees from suing, consequently bringing workers compensation matters into the tort system. Employers’ liability coverage, which is typically included within a workers compensation insurance program, addresses the need for coverage associated with these lawsuits. It pays all sums that the employer shall become legally obligated to pay as damages due to a covered loss on behalf of the employer.