Workers Compensation is a statutory benefit as per state law provided to an employee or to his/her family due to a job-related injury, illness, or death. The benefit may be wage replacement, medical expenses, employee rehabilitation, or death benefits to the employee's family.
Employers' Liability is the broader coverage of Workers Compensation. It covers employers in case they get sued for alleged business negligence that caused the employees' injury, illness or death. This usually covers defense cost, court fees, settlement, and judgement.
Workers Compensation can be tricky as each state has its own set of workers compensation laws the employers must follow. Texas for example does not require private employers to provide workers compensation as long as the employees are made aware of it. If the private employers gets a government contract, then they will be required to get workers compensation policy for all employees.
What are not covered?
Workers’ compensation won’t pay if employees:
-Intentionally caused their own injuries.
-Were injured while playing around or while intoxicated.
-Were injured outside work or while voluntarily participating in an off-duty sports or social event.
-Were injured by someone else for person reasons not related to the job.
-Were injured by an “act of God,” like a flood or hurricane, unless the job had a high exposure to these types of events.
In Network vs. Out of Network:
Most states give an in network and out of network option when buying workers compensation policy. The in network WC coverage is cheaper because the injured worker/employee can only go to limited doctors, hospital, or other participating health provider. The more expensive WC plan is called out of network since the injured worker/employee has the liberty to go to any doctor, hospital, and provider.