Pays an employee's medical bills and part of their wages when they are hurt at work, whoever was at fault, and in return the employee generally cannot sue you. Arizona, Nevada, Utah and Idaho each require it at their own employee threshold and run the system differently.
Workers' compensation is a bargain written into state law: an injured worker gets medical care and wage replacement without having to prove the employer was negligent, and the employer gets immunity from most lawsuits over that injury. The policy funds the employer's side of the bargain. It pays the medical bills in full, a share of lost wages after a waiting period, benefits for permanent impairment, retraining where the worker cannot return to the old job, and death benefits to dependants.
Arizona, Nevada, Utah and Idaho each require employers to carry it, and each sets its own rule for when the requirement starts, which is a count of employees, a type of work or both; sole proprietors and partners are typically outside it unless they elect in, and corporate officers can sometimes elect out. Independent contractors are the trap: a state agency deciding after an injury that your contractor was really an employee makes you the uninsured employer, with penalties on top of the claim. We read your state's definition against how you actually work.
The premium is payroll multiplied by a rate for each class code, the classification that describes the work being done, adjusted by an experience modifier once the business is large enough to earn one. A clerical worker and a roofer on the same payroll are rated many times apart. The analysis checks that your employees are in the right class codes, because misclassification is the commonest reason a premium is too high, and then prices the same payroll with the carriers we represent.
The policy pays all reasonable medical treatment for a work injury or occupational illness, with no deductible and no copay for the worker, for as long as treatment is related to the injury. Which doctor the worker sees is governed by state rules: some states let the employer or carrier direct care initially, others let the worker choose. The carrier pays the provider directly, and the employee never receives a bill for covered care.
After a waiting period set by the state, an employee who cannot work receives temporary disability payments, a fraction of their average weekly wage up to a state maximum, until they return to work or reach maximum medical improvement. Light-duty work reduces or ends these payments and is the single most effective thing an employer can do to hold down a claim; a return-to-work plan written before anyone is hurt is worth having.
When the worker reaches maximum medical improvement with a lasting impairment, the policy pays a permanent partial or permanent total disability benefit under a schedule set by the state. Vocational rehabilitation pays for retraining where the worker cannot go back to the old job. If a worker dies from a work injury, the policy pays funeral costs and a benefit to the surviving spouse and dependent children. These benefits are fixed by statute, and the policy pays whatever the state's schedule says with no limit chosen by you.
Part Two of the policy covers the lawsuits the exclusive-remedy bargain does not stop: a spouse's loss-of-consortium claim, a third-party suit where a manufacturer sued by your employee turns round and sues you, and claims in states where the injury falls outside the compensation system. It carries limits per accident, per employee for disease and per policy for disease, and contracts and umbrella carriers usually ask for higher limits than the standard ones.
The policy lists the states where you have employees and pays under each state's law. Adding a state before you hire there matters, because a worker hired in Nevada and injured in Utah is a Utah claim. A few states, none of the four we serve, run monopolistic state funds where the coverage has to be bought from the state; Nevada, Utah, Idaho and Arizona all have competitive markets where private carriers and, in some, a state-chartered fund write the coverage.
