Workers’ Compensation Insurance

There are two parts to Workers’ Compensation coverage:

  • Part A is for the specific state’s statutory regulations regarding the treatment, rehabilitation and return to work process for an employee who has be injured or made ill by a work related incident, and
  • Part B is for Employers Liability which deals with certain state regulations where the employee can bring judgment against the employer for compensatory and punitive damages.

Part A of Workers’ Compensation insurance coverage provides for the following remedies for a on the job injury or illness:

  1. Medical costs required to treat the injury or illness,
  2. Lost wages incurred by the employee while being treated for the injury or illness, and
  3. Rehabilitation costs incurred by the employee while aiding in returning the employee back to a productive lifestyle within a work environment.

Part B of the Workers’ Compensation insurance coverage is expressed in limits of liability shown in three categories:

  1. Liability limit for each employee accident,
  2. Liability limit for each employee disease, and
  3. Total liability limit for any disease.

There are no deductibles incurred by the employee in the treatment and rehabilitation process.
Workers’ Compensation is a state regulated law.
The coverage is a benefit to the employer and employee.
Each state has established a process by which Workers’ Compensation claims are managed by the insurance carriers.


State regulations in Tennessee allow Workers’ Compensation insurance carriers to deviate from a state rate by using Loss Cost Multipliers (LCM). Insurance carriers can deviate from the state rate by crediting the rate by 75% or debiting the rate by 75%. In addition to using the state filed Loss Cost Multipliers, insurance carriers can also apply a 25% schedule credit or debit to the manual premium.

It is critical when shopping for Workers’ Compensation insurance coverage that the business owner selects insurance agents who have knowledge of Tennessee Workers’ Compensation laws.