If you’re a business with full or part-time employees, understanding workers compensation insurance and how it’s designed to protect both your employees and your business is extremely important.
In addition to providing benefits for your sick or injured employees, workers compensation insurance can help you protect your company from lawsuits, and avoid unnecessary defense costs.
In this post, we’ll break down what workers compensation insurance is, who is covered by workers compensation insurance, and highlight some of the key aspects of workers compensation coverage.
What Is Workers Compensation Insurance?
Workers compensation is a no-fault system. This means employees can receive benefits regardless of who was at fault for their injury or illness.
In exchange, employees usually give up their right to sue their employer for workplace-related injuries.
Workers compensation insurance is designed to protect employees by providing coverage for medical expenses, lost wages, and rehabilitation costs.
It’s also designed to help protect employers from potential lawsuits related to workplace injuries.
Who Is Covered by Workers Compensation Insurance?
Most employees are covered by workers compensation insurance. These include full and part-time employees, seasonal workers, and some independent contractors in certain circumstances.
However, not all employees are covered. For example, sole proprietors and partners in a business are typically not covered under workers compensation insurance.
Understanding workers compensation insurance laws in your state, and how they might impact coverage for your employees – and your business – is critical in helping protect both your employees and your business.
Key Aspects of Workers Compensation Insurance
Some of the key aspects of workers compensation insurance include the following:
It’s Mandatory. Most states have some sort of compulsory workers compensation insurance system in place. Check with your state to see how the laws apply.
It Provides Coverage for Work-Related Injuries and Illnesses. Workers compensation insurance covers injuries and illnesses directly resulting from employment. This includes accidents on the job site, injuries caused by workplace equipment, or illnesses related to work conditions (e.g., occupational diseases).
It Provides Coverage for Medical Expenses. Workers compensation insurance typically covers the cost of necessary medical treatment related to a work-related injury or illness. This includes hospitalization, surgery, doctor visits, prescription medications, and other medical services.
It Provides Coverage for Lost Wages. Workers compensation provides wage replacement benefits if an employee is unable to work due to a work-related injury or illness. The amount of compensation usually equals a percentage of the employee’s regular wages.
It Provides Disability Benefits. Workers who suffer from a permanent or temporary disability due to a work-related incident may be eligible for disability benefits. The amount of compensation received is typically determined by the severity and duration of the disability.
It Provides Rehabilitation Services: Workers compensation insurance may cover the costs of rehabilitation services, such as physical therapy, designed to help employees recover and return to work faster.
It Provides Death Benefits. Workers compensation insurance may provide benefits to the surviving dependents or beneficiaries resulting from an employee’s work-related death.
Conclusion
It’s important for employers to understand their legal obligations regarding workers compensation insurance to ensure they have adequate coverage to protect both their employees and themselves.
Likewise, employees should be aware of their rights and how to file a workers compensation claim if they experience a work-related injury or illness.
If you have specific questions or concerns about workers compensation insurance, speak to an insurance professional, like BR Risk Group™ Specialty Insurance.