Workers' Compensation Insurance
The grand bargain
Workers' compensation is no-fault: employees give up the right to sue the employer in tort, and the employer pays statutory benefits regardless of fault. Oklahoma administers claims through the Oklahoma Workers' Compensation Commission, an administrative system. Most Oklahoma employers with employees must carry coverage or qualify as a self-insurer.
Benefits
Four categories: medical (generally unlimited and lifetime), disability income (temporary total, temporary partial, permanent partial, permanent total - usually a percentage of average weekly wage subject to a state maximum), death benefits (burial plus survivor income), and rehabilitation/retraining.
The policy
Part One - Workers Compensation pays all benefits the employer is legally obligated to pay, with no dollar limit. Part Two - Employers Liability responds to tort suits by employees outside the system, with limits such as $1,000,000. Part Three - Other States coverage is listed; 3A means all states except those with monopolistic state funds. Premium is audited and based on payroll by classification and an experience modification factor. The coverage territory includes the United States, its territories, and Canada.
Traps
Sole proprietors and partners are generally excluded unless they elect coverage; corporate officers are included but may elect out. Independent contractors are not employees, though misclassification is a major enforcement issue. Injuries from intoxication or intentional self-harm are not compensable.
Worked example: An employee injures his back lifting boxes. Medical bills and wage-loss benefits flow through Part One; Part Two matters only if the employee sues the employer in tort.