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Alternatives to Workers’ Compensation by Contract

The workers’ compensation statute is best looked at as an insurance mandate with an accompanying regulatory structure. It requires employers to carry no-fault liability insurance to compensate injured workers, and it establishes rates, minimum coverages, and liability rules.  These liability rules are created to address shortcomings in the earlier common law personal injury system by way of a legislative compromise. They enable workers to recover some compensation (including medical expenses and a portion of their lost wages) without lengthy, risky, and expensive litigation. The other part of the bargain is that they limit compensation to set schedules and limit employers’ tort liability. This legal structure comes with a host of regulatory requirements, but it also provides private employers with the alternative of opting out of the state approved insurance requirement by contracting with their workers, as long as they provide benefits to injured workers that at least equal the benefits required by law within the standard workers’ compensation insurance system.


The primary requirement for contractual alternatives is that the benefits provided must at least be equal to the benefits required of the insurance policies mandated by law. The system must contain all the provisions required of a standard workers’ compensation policy. The law does not require employers to provide benefits that go beyond what standard workers’ compensation requires, but it does permit them to offer these additional benefits. Furthermore, unless such additional benefits are conferred, employers are not permitted to charge any fee from workers.  Employers who use a substitute system for workers’ compensation benefits are required to keep statistical data for purposes of sharing with the Board of Workers’ Compensation. This allows for the board to not only take the data into account for its regulatory role, but also to make solvency determinations with respect to whether it permits the substitute system to continue operating.

Benefits to Workers

The primary upshot to these alternative systems as far as workers are concerned is that they envisage the possibility of providing more benefits than what would ordinarily be required by law. For workers in high risk positions where the likelihood of injury is great but standard workers’ compensation payments are not sufficient to offset the risks, the possibility of increased benefits may be a worthwhile tradeoff for some workers. Additionally, the potential cost savings to employers by being permitted to manage their own risks in less hazardous industries may free up assets to improve benefits offered in other areas that may be more important to workers in these fields.

Contact an Atlanta Workers’ Compensation Attorney Today

Whatever your employment situation, you most likely are entitled to workers’ compensation if you have been injured on the job. If you have contracted with your employer for an alternative to workers’ compensation, make sure you are getting at least what you are obligated to receive. If you are paying for additional benefits, make sure they are being covered. If you are injured, your employer has a legal obligation to ensure your medical expenses are paid and you are fairly compensated for your missed time at work.  Sometimes the problem is not that the employer disputes liability; sometimes the employer just is not financially prepared to satisfy their obligations. That does not have any effect on your right to recover. Contact the skilled Georgia workers’ compensation attorneys at Bader Scott Injury Lawyers today.  We will fight to make sure you get the compensation you deserve.

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Seth Bader
(678) 562-5595