(by Tarran Dookie)
WORKMEN’S COMPENSATION INSURANCE ACT
The Workmen’s Compensation Act, Ch.88:05 imposes a duty on employers to provide compensation to workmen (as defined) for illness or injury arising out of the course of their employment.
The benefits under the Act are limited to 1) manual workers and 2) persons employed otherwise than by way of manual labour whose earnings do not exceed $5,000 per year. Part V (Compulsory Insurance) obligates employers to insure their liability for illness or injury to workers (as defined) in their employ.
The legislation was passed in 1960 and today virtually no one works for less than $5,000 per year. Effectively, this means that all non-manual employees (such as clerical, administrative and managerial) are strictly outside the scope of the Act. However, insurers do cover such employees as if they were workmen as defined in the Act.
Apart from the compensation received under the Act an injured employee can pursue a common law action for further sums. One should note that the maximum amount payable is in respect of permanent total disablement and the amount payable is 48 times the average monthly wages for the 12 months prior to the injury.
A common law action will not succeed unless it is established that there was negligence on the part of the employer . The employee must establish that the employer failed to use reasonable care in one or more of the following: providing suitable and safe plant; providing a safe workplace; providing a safe system of work; engaging suitable and competent employees.
The typical workmen’s compensation policy covers the liability of the employer to pay compensation either under the Act or at common law.
INSUREDS MAY HAVE TO BEAR SOME RISKS
All liability policies carry limits per event and for any one period of insurance. The courts may award a sum that exceeds the policy limit. The insurer is only liable up to the policy limit. Any amount in excess has to be borne by the insured. Therefore, great care has to be exercised when choosing limits. While cost is a factor, it is better to have a limit that errs on the higher side than to have a limit that will provide very little indemnity when it may matter most.