Workers' Compensation insurance was established to provide partial medical care and income protection to employees who are injured or become ill from their job. These systems also provide employers incentives to reduce work-related injury and illness.
The coverage is required by each state and the wage and medical benefits vary by each state as well. Workers’ Compensation can be considered a "social insurance" because it relies on a social contract between management and labor. In exchange for a busines providing Workers’ Compensation insurance, business owners are protected from civil suits from their workers who become injured on the job.
WHO is Workers' Compensation for?
Requirements to carry Workers' Compensation vary by state. However, in most states, the coverage is needed when you have a payroll or staff working underneath your company. Some states will require a business owner to carry Workers' Comp whether they have employees or not.
WHAT does Workers' Compensation protect against?
Workers' Comp insurance provides benefits to employees that are injured or sick from direct work-related causes. It includes disability benefits, wage replacement and death benefits. Workers' Compensation also reduces your liability for work-related injuries and illnesses by enacting workplace safety guidelines and standards for employment.
WHERE does Workers' Compensation cover me?
While employees are at their work location, this coverage is meant to protect them while on the clock. This could be at OR away from the work location if directly engaged in work-related duties.
WHEN should I carry Workers' Compensation?
If you are actively using payrolled, W2 employees, it is imperative that you carry an active Work Comp policy throughout the entirety of your operations. This will protect you from litigation in the event of a work-related injury to your employees.
WHY is Workers' Compensation important?
Without an active Work Comp policy while employing payroll staff, you can find yourself as the business owner in massive litigation as well as major fines from the state you are operating in for failing to properly cover your staff. This could have major consequences to your business. It can even put a business owner out of business in some cases.
Common Workers' Compensation Coverages
Medical Expenses
Workers’ comp insurance provides coverage to help your employee pay for medical expenses related to a work-related injury or illness. This can include emergency room visits, necessary surgeries and prescriptions.
For example, if one of your electricians cuts their hand at a customer’s home, workers’ compensation insurance can help cover their hospital visit.
Missed Wages
Workers’ comp helps replace some of your employee’s lost income if they need time off to recover from a work-related injury or illness. So, if your restaurant chef spills a pot of boiling water on her arm and can’t work for two weeks, workers’ compensation coverage can help replace some of her lost wages.
Ongoing Care
Some work-related injuries or illnesses can be so severe that they need more than one treatment. For example, if your warehouse employee hurts their back while lifting heavy boxes, workers’ comp insurance can help cover their ongoing care costs, like physical therapy.
Funeral Costs
In the unfortunate event your employee loses their life from a work-related accident, workers’ compensation coverage can help cover their funeral costs and provide death benefits to your employee’s beneficiaries.
Illness
Sometimes, working conditions can expose your employees to harmful chemicals or allergens that lead to illness. If your employee gets sick due to a work-related incident or condition, workers’ comp insurance can help cover their costs for necessary treatment and ongoing care.
Repetitive Injury
Not all work-related injuries are the result of a single traumatic incident. Repetitive injuries, like carpal tunnel syndrome, can take months or years to develop. If your receptionist develops carpal tunnel syndrome after years of typing with poor ergonomics, workers’ comp can help cover treatment costs and ongoing care bills.
Disability
Some work injuries may be severe enough to temporarily or permanently disable your employee. Workers’ compensation coverage can give your disabled employees benefits to help pay their medical bills and replace some of their lost wages.
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