Hello everyone. Understanding workers’ compensation benefits can be tricky in itself, but adding another component, Part B, can make it even more confusing. Today we will offer a detailed exploration of workers’ compensation Part B and its essential role in protecting businesses from legal and financial risk arising from workplace injuries. On behalf of McGriff, I would like to take this opportunity to thank each of you for joining us today as we discuss essential insights into workers’ compensation.
My name is Lesonya Wilder, and I will be your host for the call today. There are just a couple of housekeeping points that I would like to share with you before we get started. This is a live session, and you are in listen-only mode. If you have any questions at any time during the presentation, feel free to utilize the chat box or Q&A box to type in your questions, and we will address them during the Q&A segment.
If time doesn’t permit us to answer the questions after the presentation, we will be sure to capture them and provide the responses afterward. Now, it brings me great pleasure to introduce our speakers for the hour. We have Alice Carr, Claims Account Executive with Marsh, a veteran of the insurance industry since 1990. Alice’s experience includes the handling of workers’ compensation, general liability, and commercial auto claims for large insurance carriers, as well as claim handling for a third-party administrator.
Her diverse background allows her to assist clients by protecting their assets, improving workplace safety, and reducing costs while increasing efficiency and profit margins. I’m also happy to introduce Will Stanley, also a Claims Account Executive with McGriff, an insurance industry veteran with over 25 years of experience. Will has a long history in claims management.
Prior to joining McGriff, he spent nearly four years as a claim advocate for a large agency. He has experience in evaluating high-exposure claims and developing strategies, processes, and claims management programs to successfully control claims exposure and mitigate claims outcomes. So without further ado, I will turn it over to Will to kick off the presentation. Thank you.
Hello everyone, and welcome to our webinar on Workers’ Compensation Part B. I’m Will Stanley, a Claims Account Executive here in Charlotte, North Carolina. And I’m Alice Carr, also a Claims Account Executive. When people think about workers’ compensation, they often focus on the benefits provided under Part A of the policy. Today, however, we are here to highlight the importance of Part B.
Today we’re going to discuss workers’ compensation Part B, employers liability claims, eligibility and exclusions, workers’ compensation Part B versus general liability, workers’ compensation Part B versus employment practices liability, and some key takeaways.
Today we’re going to explore Part B of the workers’ compensation policy. It is often referred to as employers liability. We’re going to discuss how Part B of the workers’ compensation policy complements Part A by protecting the employer, how it fills coverage gaps, the types of claims that fall under Part B, and how it is essential in protecting businesses from legal and financial risk.
Let’s start with the basics. How would you describe workers’ compensation Part B? Workers’ compensation Part B, often called employers liability insurance, is coverage that protects employers from lawsuits that are brought by employees, or lawsuits that are brought on an employee’s behalf, for work-related injuries or illnesses that are not covered by the state’s workers’ compensation laws.
Depending on the jurisdiction, it’s designed to cover legal defense, court settlements, and judgments. Exactly. While Part A’s no-fault system is the primary remedy for workplace injuries, and it covers medical expenses and wage replacement, let’s talk about triggering workers’ compensation Part B and its relationship to Part A of the policy. As we mentioned, it is referred to as employers liability.
It’s triggered when civil lawsuits are filed against the employer because of a work-related injury or illness, and the standard workers’ compensation benefits can’t resolve the issue or the allegations. Today, we will dive into eligibility and exclusions.
All right. Who’s eligible to file a claim under workers’ compensation Part B of the policy? Under Part B of the policy, claims are typically made against the employer. It helps protect the employer when an employee or another party sues the employer due to a work injury. The workers’ compensation exclusive remedy means that in most workplace injury cases, an employee’s sole remedy against their employer is through the workers’ compensation system.
Let’s put this in simple terms. If an employee is injured on the job, they generally cannot sue their employer for damages like pain and suffering. Those are not covered under the standard workers’ compensation policy. Instead, they receive benefits that are available through workers’ compensation, such as medical treatment, wage loss benefits, rehabilitation services, and permanency where applicable.
Can you give us some examples? Sure. Under Part B, the employee or their family members may be able to bring forth legal action, such as a lawsuit, to seek benefits. An example would be an employee who is hurt on the job. This employee collects workers’ compensation benefits. That employee also sues a third party they believe caused the injury, such as a contractor, a motorist, or an equipment company.
That third party then files a suit against the employer, alleging the employer shares or is fully responsible for that loss. Now let’s move on and talk about workers’ compensation Part B and how it compares to general liability.
Workers’ compensation Part B and general liability are different because workers’ compensation is primarily coverage designed for injured employees, while general liability policies are intended for third-party claims. Typically, general liability excludes bodily injury to an employee for any injury that arises out of work, the job, or employment.
Workers’ compensation is usually a no-fault system, so employees do not need to prove the employer was negligent to receive these benefits. In most cases, workers’ compensation is the employee’s exclusive remedy, meaning if the employee gets benefits through workers’ compensation, they are not able to get those same benefits under the general liability policy.
So what are some of the standard general liability exclusions? We’ll call it GL for short. GL does not cover workers’ compensation obligations. GL excludes employee injuries that happen during work. GL also excludes most employer liability for employee injuries under a contract. Co-employee claims may also fall outside of GL, but this depends on the policy and the state law.
When does Part B respond? Part B covers an employer’s legal liability for employee injuries or occupational diseases when an employee sues the employer for claims that are outside the workers’ compensation statute. Another example would be third-party actions or claims for care outside of the statutory system. It typically covers bodily injury by accident, bodily injury by disease, and resulting damages, including defense costs.
Can you provide us with some examples? Sure. Let’s say an employee claims the employer’s negligent safety practices failed to guard machinery effectively and caused a catastrophic injury, like an amputation or a death. Then a suit is filed for pain and suffering, loss of future income, and medical costs beyond the statutory workers’ compensation benefits.
Part B will defend and pay covered damages up to the policy limits. For instance, a subcontractor may sue the general contractor after a worker is hurt on the job, claiming that contractor was negligent. If the lawsuit is based on the employer’s negligence and seeks damages, the injured worker could have a claim outside of workers’ compensation. That’s where Part B may provide some coverage.
Again, this depends on the facts. Good point. Some laws allow injured workers to seek damages beyond standard workers’ compensation, which is key. Part B may respond, subject to any exclusions for intentional acts such as punitive damages. Also, keep in mind that many states do not allow coverage for punitive damages to be paid under an insurance policy.
Now let’s talk about workers’ compensation Part B versus employment practices liability, also known as EPL. Injuries generally are not covered under employment practices liability because EPL is designed to cover employment-related wrongful acts, not bodily injury claims. In simpler terms, EPL responds to allegations such as discrimination, harassment, retaliation, wrongful termination, and failure to promote. It is not intended to cover physical injuries arising out of employment.
Now let’s transition into why it is necessary to have Part B and the coverage gaps that it might fill. It helps fill important gaps, such as by providing defense costs and paying for judgments and settlements. It can also help when there are gaps created by differences in workers’ compensation exclusivity rules across jurisdictions. It helps protect against reputational and financial harm by limiting major out-of-pocket losses and supporting legal and defense strategies that an employer may have.
For further clarification, what types of claims fall under workers’ compensation Part B? Examples of claims that may fall under Part B include third-party-over actions, allegations of employer recklessness, requests for pain and suffering, emotional distress, failure to provide a safe work environment, and dual-employer relationships.
Part B exists because civil suits filed by employees and/or other parties can and do occur. But remember, each claim’s liability depends on the fact pattern and the law. It’s not automatic that a plaintiff will prevail. They must establish a cause of action that is not barred by the workers’ compensation exclusivity doctrine and survive an employer’s factual and legal defenses.
Remember, this coverage is important because it protects the employer from exposure not covered under workers’ compensation Part A. In some cases, parties may seek additional damages that may fall outside of standard workers’ compensation benefits, such as certain emotional distress claims, common law damages, and punitive damages where insurable, as well as significant and unpredictable legal costs, including attorney fees, expert witnesses, investigations, and court expenses.
What are some scenarios where Part B of the workers’ compensation policy might be triggered? Some common scenarios where workers’ compensation Part B is triggered include employee tort claims, such as suits alleging employer negligence, carelessness, or other wrongful acts that seek damages beyond workers’ compensation benefits, such as pain and suffering or loss of consortium.
Another example is third-party action claims. That’s where an injured employee sues the employer or a coworker as a third party. There could also be third-party suits against the employer for actions related to workplace injuries, such as a contractor suing a subcontractor.
Just remember, there are always exceptions. Even though there is exclusivity protection, not everything can be completely barred. Lawsuits based on intentional wrongdoing, gross negligence, dual-capacity theories, or other statutory exceptions that allow a civil suit to be brought despite workers’ compensation coverage can trigger Part B of the policy.
What are some important limits and exclusions to consider under Part B of the workers’ compensation policy? Some of these limits and exclusions are very important. The exclusive remedy still matters, and in jurisdictions where workers’ compensation is truly exclusive and bars most tort suits, Part B is less likely to be used. It still pays defense if a suit is brought. Coverage stops at the stated limits, though. Catastrophic awards can’t exceed those limits.
Intentional criminal acts, statutory fines, penalties, certain punitive damages where insurable by law, and contractual liabilities may also be excluded. Also, late notice or a failure to cooperate with a carrier can jeopardize that coverage. The scope of employer immunity and what workers can sue for varies by state. Part B applicability depends on these state laws.
Let’s talk about why workers’ compensation Part B is essential. Remember, it protects against civil litigation that arises from work injuries and helps mitigate financial cost to an organization. It is important to remember to examine your policy limits.
At this point, we have some key takeaways. Takeaway number one: please review Part B limits based on your industry, claims exposure, and the legal environment in each state of operation. Takeaway number two: report these incidents and lawsuits to the insurer promptly and cooperate fully. Early carrier involvement reduces defense costs and helps control exposure. Takeaway number three: preserve evidence and document corrective actions. This helps support defenses and limit future suits.
Takeaway number four: train your supervisors and enforce safety policies to reduce negligence and gross negligence exposure. Takeaway number five: coordinate with your HR team, your legal team, and your risk management team so workers’ compensation benefits, return-to-work efforts, and potential civil exposures are all aligned together. Takeaway number six: review your policy language annually. Review the limits, the exclusions, and the defense obligations within the contract. Adjust as operations or your risk changes.
All right, we’re going to talk about some additional takeaways. Let’s start with the purpose of Part B. Remember that Part B covers claim costs not handled under standard workers’ compensation laws. Some typical triggers include when an employee sues or another party sues outside the normal workers’ compensation system.
Some core protections include helping to pay defense costs, settlements, and judgments up to the policy limits. But remember, there are still some limitations within Part B and exclusions. Coverage is limited by the policy and does not apply to certain excluded situations, such as criminal acts or intentional acts. Some best-practice takeaways for an employer should be to keep adequate limits, report claims quickly, and manage risks proactively.
Yes, timeliness is critical. We also have to tell you a few things. This is a friendly reminder that coverage varies by policy form, carrier filings, state or territorial statutes, and court decisions. Nothing in this webinar should be construed as a promise of coverage. We are not attorneys, and this information is for general purposes only and does not constitute legal advice or a binding coverage determination.
Any questions? Thank you so much to Alex and Will for that wonderful presentation. At this time, we will entertain any questions that you may have. Feel free to utilize the chat box or the Q&A box to ask any questions that you may have. Everyone will receive a copy of the presentation slides and the recording afterward.
If there are no questions, on behalf of McGriff, we would like to take this opportunity to thank each of you for joining us today. As I said, we will provide you a copy of the presentation slides as well as the recording. We hope that each of you has a wonderful rest of your day, and please be on the lookout for future webinars hosted by McGriff. Thank you, and have a wonderful rest of your day.
