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16.2 Employment Conditions

Covered Employment​

A Workers’ Compensation policy only provides coverage when an employer-employee relationship exists. An employer-employee relationship generally exists when the employer:

  • Has the right to direct how the work is performed
  • Provides the equipment and tools needed for the work
  • Determines the employee’s work hours
  • Controls the results to be achieved
  • Controls the timing and frequency of compensation for the work

This definition provides the general standard for an employer-employee relationship, but each state specifies which types of workers are covered. For example, some states include minors and apprentices as employees eligible for Workers’ Compensation coverage.

Exempt Workers​

Workers’ Compensation laws generally require employers to provide coverage for all employees unless an exemption applies. Exemptions vary by state. For example, some states exempt employers with fewer than 1–3 employees from providing Workers’ Compensation coverage.

Other workers who may be exempt from Workers’ Compensation coverage, depending on state law, include:

  • Casual laborers whose work is occasional or irregular
  • Independent contractors, who generally work for multiple clients, control how they perform their work, and do not have an employer-employee relationship with the insured
  • Agricultural workers, such as farm and ranch laborers, who are often covered under federal laws
  • Domestic employees
  • Sole proprietors
  • Executive officers and directors

Covered Injuries​

Covered injuries are those that arise out of and in the course of employment, meaning:

  • The injury occurs while the employee is working or performing job duties
  • The employee is working during their scheduled or expected hours
  • The employee is performing the duties of their job
  • The injury results from a risk reasonably related to the employment

Benefits may be denied if an employee intentionally injures themselves or if the injury results from intoxication. An injury is generally not considered occupational if it occurs while the employee is at the workplace as a member of the general public or while performing personal activities unrelated to work outside of assigned work hours.

An Insurance Story

An employee visits Coffee Café on their day off and slips on a wet floor, injuring their ankle. Because the employee was not working or performing job duties, the injury is not work-related, and Workers’ Compensation benefits would not apply.

Covered injuries include occupational accidents and occupational diseases or illnesses.

Occupational Accidents​

Occupational accidents are unexpected and unplanned events that occur during employment and result in injury to one or more employees.

An Insurance Story

An employee at The Furniture Company is injured in a car accident while making deliveries for the business. Because the accident occurred while performing job duties, it is an occupational accident and is covered by Workers’ Compensation. If the accident occurred while commuting to work or traveling to a voluntary company event, it would generally not be covered.

Occupational Diseases and Illnesses​

An occupational disease is an illness that arises out of employment and is caused by conditions that are specific to that job or occupation.

Example

An employee who catches a common cold is generally not eligible for Workers’ Compensation because the illness is not specific to the job. However, a factory worker who develops respiratory disease from inhaling dust or other airborne particles at work may be eligible because the illness resulted from occupational exposure.