# Workers' Compensation Coverage B: What it is, How it Works

## What Is Workers' Compensation Coverage B?

Workers' Compensation Coverage B is an insurance policy that covers medical care, lost income, and rehabilitation costs for employees who are injured on the job. It provides coverage to employees when the employer is liable.

### Key Takeaways

*   Workers' Compensation Coverage B is an insurance policy that covers costs related to medical care and lost income for injured workers.
*   Part B workers’ compensation is for additional damages that go beyond what Part A (which satisfies state insurance requirements) covers. 
*   This coverage is generally required by states if an employer has three or more employees (including the owners of uninsured subcontractors and their employees). 
*   Injured workers can be provided 100% coverage of all medical expenses, a percentage of lost wages (which varies by state and policy), a lump sum for disability and disfigurement, and a death benefit under Part B. 

## How Workers' Compensation Coverage B Works

Workers' Compensation Coverage B is also called employers' liability coverage. Employers are required by state and federal statutes to provide coverage for their employees. Corporate insurance buyers get [workers’ compensation insurance](https://www.investopedia.com/terms/w/workers-compensation.asp) to protect their workers and meet state insurance requirements. Part B includes the two distinct parts of most standard Workers’ Compensation contracts: [parts A](https://www.investopedia.com/terms/w/workers-compensation-coverage-a.asp) and B.

Part A satisfies state insurance requirements, and Part B will respond to pay additional damages. The policy will fund employees’ medical bills, related expenses and lost wages in the case of a covered workers’ compensation loss. Payments are made normally based on predetermined schedules in the case of defined injuries. Expenses are paid accordingly as the adjuster calculates them. It covers:

*   Bodily injury by accident: $100,000 each accident.
*   Bodily injury by disease: $500,000 policy limit.
*   Bodily injury by disease: $100,000 for each employee.

Under Workers' Compensation Coverage B, workers who are injured on the job can be provided with 100% coverage of all [medical expenses](https://www.investopedia.com/terms/m/medical-expenses.asp), a percentage of lost wages (which varies by state and policy), a lump sum for disability and disfigurement, and a [death benefit](https://www.investopedia.com/terms/d/deathbenefit.asp). This coverage is required in most states if a company has three or more employees, including the owners of uninsured subcontractors, plus their employees for one year.

## Special Considerations

There are important things to remember when reviewing Workers’ Compensation coverage. It's important to make sure that Part B employers’ liability is appropriately scheduled on your corporate umbrella. As mentioned earlier, employer negligence claims can be large, thus the umbrella policy can sit on top of a normal $1,000,000 primary limit. Additionally, if a business resides in a monopolistic state like Ohio (WC provided by the state), you will need to buy the employers’ liability normally from your general liability provider as an endorsement.

## Example of Workers’ Compensation Coverage B

In the case of an employee injury and potential employer negligence, Part B will respond to pay additional damages. These payments are normally litigated and triggered by a serious injury proven to be caused by employer negligence. For Instance, an employee notices a faulty or exposed wire on a production machine and notifies their employer. The employer (for whatever reason) does not fix the wire and the employee is electrocuted. Employers’ liability would respond in the case of the employee (or their family) to pay a claim above and beyond the normal Part A statutory amount. It is normally enacted by a lawsuit.

> **Article Sources**
>
> 1.  Insurance Information Institute. "[Insuring Your Business: Small Business Owners' Guide to Insurance: Workers Compensation Insurance](https://www.iii.org/publications/insuring-your-business-small-business-owners-guide-to-insurance/specific-coverages/workers-compensation-insurance)." Accessed June 20, 2021.
>     
> 2.  National Federation of Independent Business (NFIB). "[Workers' Compensation Laws - State by State Comparison](https://www.nfib.com/content/legal-compliance/legal/workers-compensation-laws-state-by-state-comparison-57181/)." Accessed June 20, 2021.
>     
> 3.  Cornell Law School. "[Legal Information Institute: Workers Compensation](https://www.law.cornell.edu/wex/workers_compensation)." Accessed June 20, 2021.
>     
> 4.  SFM Mutual Insurance Company. "[What Are Employer Liability Limits](https://www.sfmic.com/what-are-employer-liability-limits/)." Accessed June 20, 2021.
>     
> 5.  Insurance Information Institute. "[Should I Purchase an Umbrella Liability Policy](https://www.iii.org/article/should-i-purchase-umbrella-liability-policy-0)." Accessed June 20, 2021.
>     
> 6.  Bureau of Workers' Compensation, Ohio. "[Ohio Workers' Compensation and You](https://www.bwc.ohio.gov/downloads/blankpdf/OhioWCandYou.pdf)," Page 2. Accessed June 20, 2021.