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Workers' Compensation Definitions

Agreed Medical Examiner (AME): A physician who may be selected by the parties together, when an injured worker is represented by an attorney, to assess any disputed medical-legal issues.

Consequential Bodily Injury: In Workers' Compensation, special circumstances can arise when a work-related injury causes some sort of non-work related injury. (Please see Loss of Consortium, Dual Capacity, and Third Party Over glossary definitions.)

Dual Capacity: In Workers Compensation an employer may be doubly liable to an employee who incurs bodily on the job as a result of using a product or service produced by that employer. The employee is eligible for Workers Compensation benefits and may also sue the employer because of the defectiveness of the injuring product or service.

Employee: Every person in the service of an employer for whom the employer is obligated to provide workers' compensation benefits.

Employers Liability Insurance Agency, Inc.: Provides coverage against the common law liability of an employer for injuries to employees, as distinguished from the liability imposed by the workers' compensation laws.

Experience Modification: The adjustment of premium resulting from the use of experience rating. Experience rating plans reflect an insured’s past loss experience (usually from the past three years) and use this experience to modify and determine the premium for the current policy year.

First Aid injuries: An injury is considered First Aid if it involves one-time treatment and, if necessary, a follow-up visit to observe minor scratches, cuts, burns, splinters etc. Such minor injuries ordinarily do not require ongoing medical care. A First Aid injury can be treated either by a peer/supervisor or a medical professional such as a nurse or doctor.

Fraud: An intentionally deceptive act committed to obtain an unfair or unlawful advantage. Fraud usually involves monetary gain.

Frequency: The number of times a loss occurs.

Hazard: A circumstance that increases the likelihood or potential severity of a loss.

Indemnity: In a property and casualty contract, the objective is to restore an insured to the same financial position after the loss that the insured had prior to the loss. In the most basic sense, indemnity is compensation for a loss.

Claim: Notice to an insurance company that a loss has occurred that may be covered under the terms and conditions of the policy.

Claim Adjuster: The person who evaluates the damage caused by a covered loss and determines the amount to be paid under the policy terms.

Independent Adjuster: A person or organization that provides claim adjusting services to different insurers on a contract basis.

Limits of Insurance Agency, Inc.: The maximum amount of benefits the insurance company agrees to pay in the event of a loss.

Loss of Consortium: A potential situation in any bodily injury claim (including Workers Compensation claims) where a spouse contends that the bodily injury of their partner deprives them of the natural affection (spousal duties), help, and companionship of said spouse.

Occupational Accident: A work-related accident that injures an employee.

Occupational Disease: An illness contracted as a result of employment-related exposures and conditions.

Occupational Hazard: A condition that exists in an occupation and surrounding work environment that increases the peril of accident, illness, or death.

Payroll: Usually synonymous with compensation, gross wages, or salary. The most common basis for determining workers' compensation insurance premiums. For most classifications, rates are based on $100 of payroll.

Permanent Disability Rating Schedule: The schedule that is used to determine and modify the percentage of permanent disability of an injured worker.

Qualified Medical Evaluator (QME): Appointed and regulated by DWC Medical Unit, a QME assesses an injured worker’s permanent impairment and limitations and evaluates a wide variety of disputed medical-legal issues. Often, a QME performs a separate medical evaluation when the treating physicians assessment is disputed.

Subrogation: The process of recovering the amount of claim damages paid out to a policyholder from the legally liable party. When a company pursues the legally liable third party, they are required to include the policyholder’s deductible in the recovery process.

 



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