The National Council on Compensation Insurance, Inc. (NCCI), developed the Workers’ Compensation and Employer’s Liability Insurance Policy used in most states. It covers the insured’s statutory liability under the various state workers’ compensation laws, statutes and acts. It provides defined benefits to employees for injuries sustained or diseases contracted arising out of and in the course of their employment. Every state has laws requiring such protection for workers, and those laws prescribe the amount and duration of the benefits provided. Employers liability insurance covers the common law or tort liability of an employer for an employee injuries that fall outside the scope of the state law or act that are separate and distinguished from the liability imposed by workers’ compensation laws.
All workers’ compensation legislation has five specific objectives:
- Prompt payment of adequate benefits to injured workers or their dependents according to a fixed and predetermined schedules of benefits.
- Elimination of the costs of litigation to the employee, the employer and the society as a whole.
- Establishing a guaranteed benefits payment arrangement secured by “insurance”.
- Promoting safety and health activities where the employer can easily observe the relationship between those activities and the costs of worker’s compensation benefits.
- Providing medical and rehabilitation services to injured workers.