From AOE/COE to MMI: Navigating Workers’ Comp Lingo

Posted On: November 30, 2023

Workers’ comp insurance has done wonders for supporting injured employees, but it’s not a simple topic. The terminology has a distinctly legal bent, made even more confusing by the many abbreviations used. Understanding these terms is essential for contractors to ensure compliance with workers’ comp insurance California regulations. Fortunately, you can start your research with this handy glossary.

Workers’ Comp Insurance: A Glossary of 3 Common Terms

This cheat sheet provides an overview of three terms you may see in workers’ compensation policies. While not comprehensive, it’s a good foundation for those new to the topic.

1. MMI: Maximum Medical Improvement

When workers get injured on the job, they may not recover fully. Maximum medical improvement is the upper limit of recovery as determined by a medical professional. Workers’ comp insurance may pay for further treatments, but based on your condition, your physician doesn’t believe they will provide significant progress.

For example, if you shatter your shoulder in a workplace accident, your bones will likely mend, and you’ll have use of your arm again. However, based on the severity of the fracture, you now have a limited range of motion. You have long-term medical issues from this injury, but you’ve healed as best you can.

2. AOE/COE: Arising Out of Employment/Course of Employment

Workers’ compensation only covers injuries incurred on the job. However, there is some gray area about what this means, especially for contractors working on job sites for various clients. AOE/COE provides criteria for workers’ comp eligibility.

AOE, or arising out of employment, means employment activities directly caused the injury. For instance, if a factory worker’s hand gets caught in a machine, that is an injury arising out of employment.

COE, or in the course of employment, means the injury happens while the employee is on the clock. Additionally, the employee must sustain the injury while performing duties for the employer’s benefit in a work-related location. For example, workers’ comp insurance would apply in the above example if the worker were doing maintenance on the machine at an employer-owned factory.

3. IR: Impairment Rating

Sometimes, when people reach their MMI, their limitations drastically affect their ability to work and even function in daily life. An impairment rating is a measurement assigned by physicians describing the extent of an individual’s disability.

The IR plays a massive role in how much compensation an employee receives. Employees with total or permanent impairments typically receive more benefits because the injury limits their future earnings.

Additional Help and Resources for Workers’ Comp Insurance

Self-education is critical when dealing with workers’ comp insurance, but you don’t have to become an expert. Instead, you should rely on professionals, such as the agents at Western Republic, to help you get the most from your policy.

Insurance agents thoroughly understand coverage and keep up with the evolving industry to ensure their advice remains accurate. Tapping into this knowledge offers several benefits:

  • Explanations of unfamiliar jargon
  • Coverage that complies with industry requirements
  • Policies tailored to your needs and budget

Workers’ comp insurance can get complicated, but finding the right policy doesn’t have to be. The experts at Western Republic are here to answer your questions and streamline the coverage buying process. Reach out today to get started.

About Western Republic

Locally owned and operated since 2009, Gabe Stubin of Western Republic Insurance Services has delivered quality insurance solutions to individuals in Huntington Beach, California, for over 17 years. Specializing in Commercial Business insurance coverage, our team of knowledgeable insurance professionals is committed to helping you find a policy that fits your needs. We focus on providing individualized attention and quality customer service to create an experience that’s difficult to find in today’s market. At Western Republic Insurance Services, we’ll work with you to ensure that you and those you care about most are protected.

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