• When an employee suffers a work related injury or illness, workers compensation insurance steps in to provide benefits based on the type of illness or injury sustained. Workers compensation is based on a no-fault system, which means that an injured employee does not need to prove that the injury or illness was someone else's fault in order to receive workers compensation benefits for an on-the-job injury or illness.
  • As a California employer you are required under California Labor Code Section 3700 to provide workers compensation benefits for your employees.
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  • Coverage Sections
  • Workers compensation insurance is divided into two coverage sections. In workers compensation part one the insurance company agrees to promptly pay all benefits and compensation due to an injured worker by workers compensation laws of the states listed on the declarations page of the policy. In employers liability part two the employer is protected against situations where an employee can sue for injuries suffered under common law liability (i.e., consequential bodily injury, loss of consortium, dual capacity, or third party over actions). These types of injuries in the course of employment are not covered under workers compensation law and are therefore not compensable under the workers compensation part one.
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  • Classification and Rating
  • Classification of workers compensation insurance is based upon the specific duties that your employees perform in the course of their employment with your company. These classifications are developed and assigned by the Workers Compensation Insurance Rating Bureau (WCIRB) in most cases. Your workers compensation insurance company when working with the WCIRB must use the classification codes the WCIRB provides when rating your specific policy. Insurance companies can develop and submit their own classification system to the CDI for approval, but this is uncommon.
  • Each classification is assigned a specific rate by the insurance company, which helps determine the overall premium for your policy. The WCIRB also generates the experience modification that must be applied to your policy. The experience modification is calculated from loss information your insurance company is required to submit to the WCIRB on an annual basis. The WCIRB provides a policyholder ombudsman who is available to answer questions from employers on classification, experience modification, and rating issues.

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