What is workers compensation insurance?
Keeping your employees safe at work is important to most business owners. But when a worker does suffer an injury, workers compensation coverage provides your employees with protection they need, and provides you with peace of mind that they’ll be covered.
It’s the law, but…
Workers' compensation insurance is often mandatory for many businesses if they have employees, no matter what the job requires. It covers medical costs and a portion of lost wages for employees who become injured or ill on the job.
Workers' Compensation is like an airbag for your business. When trouble strikes, it deploys to help your employee get back to work as fast as possible, minimizing the damage to your business.
If that sounds like a luxury to you, keep in mind, it's probably a good thing for your business. Imagine having to pay for a slip-and-fall accident or a case of carpal tunnel syndrome straight out of your business checking account.
It’s a good thing for you, and your employees.
Workers' comp insurance may also protect you from being sued by employees for workplace conditions, which a court finds your company liable in causing an injury or illness to your employees.
What if it’s caused by employee carelessness?
Under normal circumstances, fault does not matter in a workers' compensation claim. And each state has its own workers' compensation system, which is a mandated program to compensate employees who are injured in a workplace accident or rendered ill because of the job.
It’s designed to ensure payment by employers for some part of the cost of injuries, or in some cases, of occupational diseases, received by employees in the course of their work.
Workers' Comp Insurance Basics
Since workers' comp insurance typically only covers injuries or illnesses when they occur as a result of duties performed on the job or while at work, the scope of the coverage of the policy is limited to duties performed by employees.
Injuries that may be covered by workers' comp insurance include lifting heavy equipment, slipping on a wet or oily surface, or sustaining injury due to fires or explosions.
Workers' Compensation Insurance may cover:
- Medical bills for employees hurt or sickened at work.
- Ongoing care, including rehabilitation.
- Wages missed while recovering (often partial).
- Employee lawsuits over injuries (through Employer's Liability Insurance).
- Funeral expenses, if an employee is killed on the job.
- Death benefits to support the deceased's family.