Georgia Workers’ Compensation Insurance Policy – A Brief Discussion

Written by: Rayford H. Taylor, Esq.

Georgia employers are generally aware they must purchase and maintain workers’ compensation insurance to operate within the state. Those employers obtain coverage for themselves and their employees, but often do not pay attention to the types of coverages included in a workers’ compensation and employer’s liability insurance policy. This will be a brief discussion of the types of coverage employers may have available under such policies.

For purposes of this article, discussion will focus on Parts 1 and 2 of the liability policy utilized in Georgia. Part 1 contains the traditional workers’ compensation insurance provisions for payment of claims arising out of and in the course of employment. Part 2 contains the Employer’s Liability Insurance provisions. That portion of the policy applies to bodily injuries arising out of and in the course of employment which are not covered by workers’ compensation and can provide insurance protection to an employer from claims by individuals who are not employees.

Part 1 of a workers’ compensation policy provides medical and indemnity benefits for an injured employee. That portion of the insurance policy also provides insurance coverage to the employer as a result of an otherwise compensable accident.

Part 2 is designed to pay claims against an employer in certain instances wherein an employer may be liable for injuries arising out of and in the course of employment but which do not come within the workers’ compensation act and, in some instances, can provide benefits to a third party as a result of a workers’ compensation accident to an employee. Part 2 of the policy is not designed to constitute a general liability policy or to provide overall insurance protection for an employer in the event of a workers’ compensation injury at work. Part 2 may provide limited coverage for an employer being sued by a third party arising out of an otherwise compensable accident. Part 2 does not provide an employer with protection pursuant to a contract or provide for payment of punitive damages.

An example of where Parts 1 and 2 could operate together to protect an employer is where an employee sustains a work-related injury and a spouse, child, or immediate relative of the injured employee ,also, is injured in that same accident. In such a situation, Part 1 of the policy would provide workers’ compensation coverage for the employee’s injuries and treatment. If one of the employee’s family members filed a claim against the Employer, Part 2 potentially protects that employer by providing benefits to the spouse, child, or other relative of the injured employee. The employer would have protection from those claims, and the relative would be provided benefits similar to that of the employee.

As a general rule, workers’ compensation benefits under Part 1 of the insurance policy have no maximum dollar limit and provide appropriate coverage for the employee. Part 2 typically imposes an overall limit on the benefit coverage available from that portion of the policy. That coverage, which is limited in scope, nevertheless could provide both protection for the employer and benefits to the injured individual.

Employers are encouraged to review their insurance policies carefully with their counsel to determine if they have maximum protection or coverage in the event of injuries in the workplace. Part 2 of the workers’ compensation insurance policy does not exist to provide general liability coverage to an employer or to protect that employer from litigation arising from third parties who may have become injured on the premises. An employer may need to obtain a General Liability policy to protect itself from claims filed by individuals who are not the employer’s employees.

For further inquiries regarding Georgia workers’ compensation insurance, please contact attorney Rayford Taylor at rtaylor@hallboothsmith.com.