At some point, nearly every employer will have an employee report an injury and seek treatment under a workers compensation policy. Every US state has “industrial insurance” or workers compensation laws that define the benefits payable to the injured worker (NRS 616 in Nevada). While the benefits afforded to an injured worker can vary between jurisdictions, there is one critical concept to which every state agrees: to be covered by workers compensation insurance (or self-insurance) the employee injury or illness must arise out of and in the course and scope of employment.
To understand this concept further, let’s examine the meaning of “arise out of and in the course and scope of employment”. In simplistic terms this concept dictates that:
- The injured employee was engaged in an activity that benefits the employer,
- The injury occurred at the employer’s location or a location mandated or reasonably expected by the employer,
- The proximate cause of the injury was related to the occupation of the employee.
A few claim scenarios are helpful to understand when an employee injury becomes compensable under workers compensation coverage. These are actual injury and claim scenarios that clients of Safeguard Insurance have reported over the years:
- An employee of an electrical contractor is dispatched to install ceiling fans at a customer’s home. The employee must stand on a ladder to install the fans. The ladder becomes unstable, tips over, and the employee suffers a broken arm in the fall.
- An outside sales employee visits a local restaurant for his lunch break. While in the restaurant, he slips on a wet floor and suffers a severe back injury.
- A truck driver for a distribution company takes a break from his normal delivery route to do a little scenic site-seeing. While on this site-seeing excursion, the driver is involved in an auto accident and suffers injuries.
- An outside sales employee meets clients at a local restaurant for a business meeting and lunch. During the lunch meeting, he uses the restroom and slips and falls on the wet floor. He suffers a severe head and neck injury as a result of the fall.
- Two employees that work in the same retail store become involved in a verbal argument over their favorite sports team. The employees decide to “settle the argument like men” and step outside to engage in a voluntary physical altercation. Both employees suffer severe bruising, sprains, and dental injuries.
Using the “course and scope” rule we can examine each claim and determine if workers compensation coverage might apply:
- This situation seems fairly uncomplicated. The employee was assigned a task for the benefit of his employer. He was working at an expected location. How and why the ladder became unstable is probably not relevant to the employee receiving compensation benefits. In this case, workers compensation coverage should apply.
- Generally speaking, employees are not covered for injuries that occur while on a lunch break. This injury would likely not be covered by workers compensation.
- The driver was injured in an auto accident, which is certainly within the scope of his occupation. However, his unauthorized site seeing excursion means he was no longer working for the benefit of his employer or at an expected location. It is very likely this claim would be denied coverage under a workers compensation policy.
- This scenario also occurred during the employee’s lunch break. That that employee was meeting with a customer and presumably discussing business opportunities changes the dynamic. His lunch meeting was for the benefit of his employer. A sales meeting is certainly within the scope of his employment. This scenario would very likely be afforded coverage under a workers compensation policy.
- Two employees that voluntarily engage in a physical altercation would be hard-pressed to claim their injuries arose from and are related to the course and scope of employment. This scenario would almost certainly warrant a denial of workers compensation benefits to both employees.
Keep in mind that not every employee injury and subsequent workers compensation claim is the same. Two scenarios that seem very similar on the surface may, in fact, have hidden details that change the outcome of the claim. For example, if an employee is under the influence of drugs or alcohol at the time of an injury, coverage may be reduced or denied completely even if the scenario would otherwise warrant coverage. As a disclaimer, the above claim scenarios and analysis are meant to serve as a general overview of possible employee injuries and possible coverage decisions. They are not a conclusive narrative of coverage applicability for every situation.
Remember that employers are protected by exclusive remedy laws. However, exclusive remedy does not preclude the injured employee from pursuing a claim against a third-party. For example, the electrical contractor employee that fell from the ladder may pursue a defective product case against the ladder manufacturer. The sales employee that was injured by a slip and fall accident in a restaurant may pursue a premises liability claim. The errant driver on the site seeing excursion may have a valid auto liability claim against the other driver. Lastly, the two employees that punched-out their differences may file lawsuits against each other for personal injury.
Workers Compensation Insurance Quotes
If you have questions about your workers compensation or any other business insurance policies, please call the team at Safeguard Insurance today at (702) 638-0022. We are happy to provide a no-obligation policy review or comparison quotes.