Workers' Compensation
The principle
Workers compensation is a statutory, no-fault benefit system. Employees give up the right to sue the employer for negligence, and the employer pays medical, disability and death benefits regardless of fault - the exclusive remedy. Coverage follows the employee, not the premises.
Policy parts
Part One, workers compensation, agrees to pay all benefits required by law with no dollar limit. Part Two, employers liability, responds when an employee sues the employer outside the statutory system, subject to stated limits. Part Three covers other states, and Part Four states the insured's duties after an injury.
Benefits
Unlimited medical care, temporary total and temporary partial disability, permanent partial and permanent total disability, rehabilitation, and death benefits for dependents. Wage replacement is typically about two-thirds of the average weekly wage, subject to a state maximum.
Premium
Payroll per $100 of remuneration multiplied by the classification rate, adjusted by the experience modification factor, plus minimum premium. Premiums are audited at expiration. Certificates of insurance prove coverage to general contractors and landlords.
Michigan specifics
Michigan requires workers compensation for employers who regularly employ three or more employees; construction employers must carry coverage regardless of that count. Sole proprietors and partners are excluded unless they elect coverage, while corporate officers are generally included.
Traps
Part One has no dollar limit while Part Two does. An experience modification below 1.00 reflects better-than-average losses. Injuries during employer-required travel or temporary out-of-state work may still be covered.