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Workers Comp and Casualty terms
Injured workers, casualty trends and the long tail.
Assigned risk planA state-run residual market that provides workers' compensation to employers that cannot buy it from an insurer in the voluntary market.Class codeThe numeric code that classifies a business's operations for rating, setting the workers' compensation rate per $100 of payroll.Employers' liabilityThe part of a workers' compensation policy covering suits over workplace injuries that fall outside the comp system, such as third-party-over claims.Experience modification rate (EMR)A multiplier on workers' compensation premium comparing an employer's actual claim losses with the losses expected for its industry and size.Large deductible programA policy where the insurer pays claims and then bills you for losses up to a high per-claim deductible, in return for lower premium and secured collateral.Monopolistic state fundA government-run workers' comp fund that is the exclusive source of coverage in its state; employers buy from it or self-insure, not from private carriers.NCCIThe National Council on Compensation Insurance, the rating and data organization behind workers' comp class codes, loss costs and mods in most states.Other states coverageWorkers' comp protection in Part Three of the standard policy that can apply in a state not listed in Item 3.A when you begin work there during the policy term.Pay-as-you-goA workers' comp billing arrangement where premium is calculated and paid each pay period on actual payroll, rather than as a large deposit trued up at audit.Premium auditThe insurer's after-the-fact review of payroll, sales or other exposures that replaces the pricing estimates, producing an additional or return premium.Retrospective ratingA rating plan that sets the final premium after the policy ends from the insured's actual losses in that period, within a minimum and a maximum.Schedule ratingAn underwriter's credits or debits to manual premium for risk traits that manual rates miss, such as premises condition, safety program or management quality.Stop gap coverageEmployers' liability insurance bought separately where a state fund provides workers' comp but does not insure lawsuits by injured employees or their families.USL&H coverageWorkers' comp coverage, added by endorsement, for maritime workers on or near navigable waters who fall under the federal Longshore Act.Workers' compensationState-mandated no-fault insurance that pays medical care and part of lost wages for work-related injuries, in exchange for limits on employee lawsuits.DART rateAn OSHA incident rate counting injury and illness cases that caused days away from work, restricted duty or a job transfer, per 100 full-time workers.Loss controlThe inspections, safety programs and physical improvements that a business and its insurer use to make claims less frequent and less severe.OSHA recordable injuryA work-related injury or illness meeting OSHA's recording criteria, such as lost time, restricted duty or care beyond first aid, entered on the OSHA 300 log.Total recordable incident rate (TRIR)A safety metric showing OSHA-recordable injuries and illnesses per 100 full-time workers in a year, calculated from case counts and hours worked.Duty to defendA liability insurer's obligation to pay for your defense of a lawsuit that could potentially fall within coverage, which is broader than its duty to pay.Duty to indemnifyThe insurer's obligation to pay a covered judgment or settlement against you, decided on the facts established rather than the complaint's allegations.Nuclear verdictA jury verdict of $10 million or more against a business, far above what the economic losses would suggest, that pushes up liability and umbrella costs.Punitive damagesDamages awarded to punish and deter malice, fraud or reckless conduct rather than to compensate; whether insurance may pay them depends on state law.Reservation of rightsAn insurer's written notice that it is handling a claim or defending a suit while keeping the right to deny coverage or recover costs later.Social inflationGrowth in liability claim costs beyond general price inflation, driven by larger verdicts, litigation funding, advertising and shifting jury attitudes.SubrogationAn insurer's right, after paying a claim, to step into the policyholder's position and recover the loss from whoever caused it.Independent medical examination (IME)A one-time exam of an injured worker by a physician who is not treating them, used to assess diagnosis, cause, treatment needs, impairment and ability to work.Light dutyTemporary, modified work offered to an injured employee whose doctor has set restrictions, so the person stays on the job while recovering from a work injury.Maximum medical improvement (MMI)The point in a work injury when the condition has stabilized and further recovery is not expected, so permanent impairment can be measured and rated.Permanent partial disabilityA workers' comp benefit for a lasting impairment that limits but does not end a worker's ability to work, set by an impairment rating or state schedule.Return-to-work programAn employer program that brings injured workers back to modified or transitional duty once a doctor clears them, to shorten claims and keep them connected.Temporary total disabilityWorkers' comp wage-loss benefit paid while an injured worker cannot work at all but is expected to recover, commonly about two-thirds of pre-injury pay.