Workers Compensation Policy = Contract?
We received this question on the similarities or differences between a Workers Compensation policy and a contract two weeks ago. Every few months J&L receives a few basic questions on workers comp that I should write more explanation or back-to-basics articles.
My older brother, David, who reads all of my articles and newsletters, has brought up more than a few times that the articles seem to get too deep into the weeds for a general audience to read and appreciate the articles. He liked the article on former President Nixon’s administration examining Workers Compensation at the Federal level and the Elvis meets President Nixon pic.
Workers Compensation Policy – Contract Comparison
A few years back (more than a few), I was taught about the parts of a valid contract. Let us look at those parts and compare them to a Workers Compensation policy.
Please note that this is not legal advice. The following should be considered as Risk Management suggestions.
Five Parts of A Contract
The Five Parts of a valid contract are:
- Offer made
- Acceptance
- Consideration
- Competency and capacity
- Legality or legal intent
Comparison To Workers Compensation
- Initial or Renewal Policy Forwarded to Insured Client
- Insureds Signature
- Initial Policy Premium
- Signature of the business owner or one of the officers who has signature authority
- The intent is to cover the insured’s employees for compensable on-the-job injuries.
Final Thoughts And Suggestions
Before one signs off on a Workers Compensation policy, one should always read the policy completely including the often unread endorsements at the end of a policy. Check out an old but often-read article on DICEE – the five parts of any policy – including Workers’ Compensation.
DICEE is the easiest way to remember the parts of a policy if you are reviewing your policy before or after signature.
DICEE is an acronym for Declarations, Inclusions/Insuring Agreements, Conditions, Exclusions, and Endorsements.
