Accidents can happen to anyone, and when they do, your ministry may be held liable for costly medical bills. Workers’ compensation exists to protect you and your employees from the massive financial and reputational backlash that can result from the accidents; however, it is regulated at the state level and can get tricky with the varying requirements. Fortunately, the United Methodist Insurance Program (UMIP) has created a comprehensive guide to help you navigate workers’ compensation, employee liability, and the associated benefits and limitations.
Opting Out: A Risky Move
With states regulating workers’ compensation, they sometimes grant certain organizations the autonomy to opt out based on their size or type of work. It is crucial to realize that opting out of workers' compensation opens you to civil suits for work-related injuries. Opting out may also deny your employees and their families compensation, leaving them without support for medical expenses, missing wages, vocational rehabilitation, and death benefits.
Coverage and Limitations
Workers’ compensation benefits cover work-related injuries and illnesses; however, they are defined by the state and come with certain state-specific limitations. Depending on your state’s laws, a policy may not cover:
Injuries in a fight your employee caused
Self-inflicted injuries
Injuries to intoxicated employees
Emotional issues
Injuries incurred during your employee’s commute
Physical and emotional injuries caused by the employer, including assault, battery, defamation, fraud, or torts
Losing Sole-Remedy Protection
Workers’ compensation provides sole-remedy protection against civil suits, but it is possible to lose that protection due to gross negligence, malicious intent, and employment-related practices (e.g. discrimination, wrongful termination, retaliation). As always, be mindful of your organization’s treatment of employees.
Volunteer Coverage
When it comes to volunteers, or people working in exchange for non-monetary compensation (e.g., work for food), coverage can get complicated. Definitions of what qualifies as a volunteer vary state by state, with some restricting coverage for these individuals. Know and understand your state's specific rules so that your ministry is adequately protected!
Employer’s Liability (EL) Coverage
Employer’s Liability (EL) is typically bundled with workers' compensation. This coverage, often called Part 2 (with workers' compensation being Part 1), protects against potential lawsuits from employees or third parties. It is important to realize that this insurance does not cover employees’ lost wages and medical expenses. The General Council on Finance and Administration (GCFA) recommends that you carry the maximum $1,000,000 limits for accident and disease coverage.
Employers liability is not included in policies in the monopolistic states of North Dakota, Ohio, Washington, and Wyoming. The most cost-effective solution is have a stop gap coverage endorsement added to your general liability coverage. Employers liability is also available as a stand-alone policy.
What Does EL Cover?
Negligence: Lawsuits for unsafe working conditions
Third-Party Suits: Claims such as failure to provide adequate training to an employee
Dual Capacity: Injuries from products or services you provide, or in another capacity like a landlord.
Consequential Bodily Injury: Secondary injuries or illness contracted by close contacts of the employee
Loss of Consortium: Compensation for the loss of companionship or support as a result of the workplace injury or illness
What EL Does Not Cover:
Criminal acts
Fraud
Employment-related practices
Sexual misconduct
If you have specific questions about workers' compensation or employer's liability coverage, or if you'd like a personalized quote tailored to your ministry’s needs, we're here to help! Contact us at 484-654-3380 or at UMI@sovinsurance.com, or click here to request a quote online.
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