Summary: Workers' compensation insurance provides benefits to employees injured in certain work-related incidents. But in what cases would workers' comp coverage not apply? This article discusses the course and scope rule, and goes over the types of employee injuries workers' compensation would NOT cover.
Workers' Compensation Insurance: What's Covered and What's Not?
Workers’ compensation insurance protects your business and your workforce by providing benefits to most types of employees who are injured on the job. These benefits can address medical care and related medical costs, retraining, lost wages until the employee can return to work or compensation for permanent disability. Benefits may be payable to dependents if a worker is killed in the course and scope of employment.
Workers’ compensation insurance is state-mandated, meaning that every state has its own workers’ compensation laws and programs. Every state other than Texas requires businesses to carry workers’ compensation insurance if they employ a certain number of people. Every industry from retail to construction faces unique risk exposures and will require workers’ comp coverage for their employees.
Course and Scope Rule for Workers Compensation Coverage
Employees injured outside of work can also be eligible for workers’ compensation benefits under the course and scope rule.
The course and scope rule says that, generally, if an employee deviates from performing their job duties, does something for personal benefit and is not furthering the business of the employer, then any injury that occurs during the time of the deviation is not within the course of employment and is not covered. However, minor deviations, especially with employer approval and personal comfort may be covered. Check with your workers’ compensation professional for specific details.
While there are exceptions, typically, workers’ compensation covers an employee for an injury in the following incidents:
- Employee’s contract includes transportation to and from work
- Walking to/from the place of employment while in a company parking lot during a designated time (right before or after the work shift starts)
- Company-sponsored events, such as sports teams, where attendance is mandatory
- Work from home
- Traveling on company-sponsored business
What Types of Employee Injuries Does Workers’ Compensation Insurance NOT Cover?
Workers’ compensation insurance covers most incidents that occur in the course and scope of employment or with expressed permission from the employer outside of the workplace. Ultimately, workplace incidents that involve employee injuries have to be determined on a case-by-case basis. However, there are situations where injured employee claims would not be covered. Examples of these include:
- Driving to/from work: If an employee is injured on their commute to or from work, this is not considered within the course of their employment and would therefore not be covered unless the employee has permission.
- Intoxication/intentional act: If an employee is under the influence of an illegal substance and intoxicated, and the intoxication is the sole cause of his or her injury, the injury is generally not covered.
- Horseplay: Horseplay in the workplace, in general, does not further the course of business, so a resulting injury would not be covered. However, there is an exception to that rule if an employee gets harmed during the incident, but wasn’t directly involved in the horseplay.
- Intentional acts: When a worker intentionally causes their workplace injuries or illnesses, they are not covered under a workers’ comp insurance policy.
- Illegal activities: Employee injuries due to illegal activities at the worksite are not covered by an organization’s workers’ compensation insurance policy.
- Policy violations: Workers’ comp does not cover employees who are injured while violating company policies, procedures and protocols.
- Terminated employees: Workers who have been laid off or terminated from a job will no longer be covered under workers’ comp insurance, unless the injury predated the employee termination.
Protect Your Workers with Workers’ Compensation Insurance from AmTrust Financial
AmTrust Financial is a leading workers’ compensation carrier for small to mid-sized businesses across the country. Contact us to learn how we can create a small business insurance package, including workers’ comp insurance for your organizations.
This material is for informational purposes only and is not legal or business advice. Neither AmTrust Financial Services, Inc. nor any of its subsidiaries or affiliates represents or warrants that the information contained herein is appropriate or suitable for any specific business or legal purpose. Readers seeking resolution of specific questions should consult their business and/or legal advisors. Coverages may vary by location. Contact your local RSM for more information.
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