Workers’ compensation insurance, by definition, “provides medical expenses, lost wages, and rehabilitation costs to employees who are injured or become ill ‘in the course and scope’ of their job. It also pays death benefits to families of employees who are killed on the job.” Mandates and medical benefits covered by workers’ compensation vary by state. An employer purchases this type of insurance from a carrier. Workers’ compensation insurance is underwritten by carriers and publicly supported state funds (depending on the state).


Benefits of workers’ compensation


Though it protects employees, it also protects their employers. That’s because employees can only file for compensation if their injury or illness happened on the job.


For more information about workers’ compensation and how it works, please refer to the following frequently asked questions about this topic:


Is COVID-19 covered under workers’ compensation?


In general, workers’ compensation does not cover illnesses like the cold or flu because it’s difficult to tie them to one source of infection, such as the workplace. However, the COVID-19 pandemic has caused many jobs not generally considered dangerous to suddenly be viewed that way. The Department of Labor and Industries has mandated that health care workers and first responders receive coverage of health care expenses and wage-replacement benefits related to COVID-19. Other essential workers are evaluated for coverage on a case-by-case basis. For more information, visit for differences state-by-state.


Are my employees covered at home during COVID-19 if they are injured or contract it?


In general, workers’ compensation policies require employees to receive coverage if they were injured or became ill on the job, regardless of the location where the injury or illness occurred. Though employers have no control over employees’ work-at-home conditions, courts have in the past ruled that irrelevant. As related to COVID-19 and teleworkers, it’s best to consult your state contact for coverage requirements.




Are there other options that exist for me other than purchasing traditional workers’ comp insurance?


As with most things related to workers’ compensation, alternatives differ by what is allowed by your state. Some workers’ compensation policies provide the option for “guaranteed cost” insurance, also known as “first dollar coverage.” There is no deductible to meet before the insurance carrier begins paying your claims. This means your workers’ compensation policy will require a flat fee for a given policy period, with no adjustments for losses, which is especially helpful if you own a small or medium-sized business. Depending on the size of your company or the state where you do business, you may also be eligible for other alternative risk programs, such as a large deductible plan, a retrospectively rated plan, a captive, and more.


What is an experience modifier, and how does it affect me?


An experience modifier, also known as an “experience mod” or “e-mod,” is the factor created by the National Council on Compensation Insurance (NCCI), or in the case of 13 states, their own independent rating bureaus. Your claims profile is compared to the claims profiles of other companies in your industry that are similar in size. Based on how your claims profile compares, your mod will either represent a credit or debit that is applied to your workers’ comp coverage.


Do fraudulent claims count against me any differently than legitimate ones?


Indirectly, yes. Insurance fraud could result in workers’ comp insurance rates being raised in your state, resulting in higher premiums. Common types of workers’ comp fraud include exaggerated severity, resulting in the employee staying off the job longer, and misclassification of employees.


Have more questions or need more information?


We can help. Odell Studner specializes in consultation to reduce risk. To learn more, contact us today!