Q. 4: What Are The Disadvantages of "Opting Out" ?
A. With Worker's Compensation, the benefits are the employee's "exclusive remedy" in most cases. An exception would be gross negligence on the part of the employer. It's important to remember that even if an employer has workers' compensation coverage, it can still be sued for wrongful death or gross negligence, which may often occur when there is a serious injury. Workers' comp policies generally do not provide coverage for this type of lawsuit - Occupational accident insurance does.
When an employer "opts out", an employee could choose to sue an employer for his injuries. This is why Occupational Accident insurance is so important . This type of insurance will pay for defense costs and judgments should a lawsuit come about. Also, as part of a non-subscription program, employees sign a mediation/binding arbitration agreement. This keeps the lawsuit out of the courts and directly to arbitration. The alternative dispute resolution methods will reduce the cost of litigation. Studies reveal that less then 1% of all claims result in lawsuits. More on this in the other questions.
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