Workers’ Comp Basics
Workers compensation insurance is a mandatory type of coverage carried by many businesses. It is a state-regulated insurance coverage program which helps people with work related injuries and illnesses. It covers lost wages, as well as medical treatment which results from an employee’s work related illness or injury. It also covers services required to help an employee recover and also return to work.
Workers compensation (formerly workman’s compensation) emerged from a grand bargain between workers and business owners. Business owners were tired of injured workers suing them while, on the other hand, workers were tired of getting injured.
What Does Workers Comp Cover?
Workers compensation insurance coverage was designed to help pay for job illnesses and injuries without the rigmarole of a lawsuit. This liability insurance cover can help your business do 3 things:
- Pay for medical costs and replacement wages when employees get injured at workplace.
- Comply with state Workers’ compensation laws.
- Pay for legal costs if an employee sues over a workplace injury the policy does not cover.
- Most states require employers to purchase workers’ compensation coverage as soon as they hire their-first employee. Even when that is not the case, it is smart to have this coverage, because the cost of work injuries are substantial.
Protecting Your Employees and Your Business
Workers’ compensation coverage can pay for 3 things when an employee gets injured at workplace: medical bills, recovery expenses, and partial missed wages. In case an employee dies, the policy can cover funeral costs and compensation or benefits to the worker’s family. And depending on contract requirements and state laws, you may need this insurance policy to cover employees, freelancers, contractors, or even yourself.
Workers’ compensation insurance typically only covers illnesses or injuries when they happen as a result of duties executed on the job or while working.
Examples of injuries which may be covered by workers’ compensation include injuries caused by slipping on a wet or oily surface, lifting heavy equipment, or sustaining injury because of fires or explosions. Depending on the severity and type of the injury, workers’ comp may also offer:
Payments to replace part of an injured employee’s lost income or wages, up to time and dollar-limits set by the law;
- Compensation for burial costs for employees who die on the job; and
- death-benefits for dependents of employees who die on the job.
Many state workers’ compensation programs do not provide policy coverage for injuries which occur while an employee isn’t acting within the scope of employment – like playing football with others on a day off. Workers’ compensation does not pay for injuries that are:
- result from voluntary drug or alcohol intoxication or horseplay;
- result from voluntary participation in off duty social, recreational, or sports events;
- are intentional or self-inflicted;
- are inflicted by somebody for personal reasons un-related to the job; or
- result from “acts of God” (such as floods or hurricanes), unless the work has a high-risk of such injuries.
Workers’ Comp provides your employees valuable benefits while protecting your business or company from legal exposure. The statutes and regulations of each state, as they apply to workers’ compensation insurance, vary significantly.
Who Needs Workers’ Compensation Coverage?
Workers’ comp coverage is required by law in virtually every state. These are laws designed to ensure compensation by employers for part of the cost of injuries or illness, or in some instances, of occupational diseases, employees receive in the course of their work. Besides, workers’ compensation coverage can also protect your business or company from being sued by employees for conditions in the workplace which can cause an injury or illness.
Workers’ compensation insurance is an auditable policy. That means, that the initial premium is based upon your estimated pay-rolls for the upcoming policy period. An audit is performed at the end of the policy period to ensure that the premium reflects the actual pay-roll amount. Besides, state workers’ comp laws and other governing authorities require the policy be audited in order to ensure workers are paying for their actual exposure to risk. Differences between the estimated data and the actual information obtained via the audit can result in payment of-an additional premium or a premium-refund. In addition, the pay-roll on your current policy cover may be adjusted to reflect the up-dated information.
Free Workers Compensation Insurance Quote
Workers compensation injuries cost businesses in lost productivity. Without workers compensation insurance, these costs would be compounded by employee-medical expenses and missed wages. If you are looking for a solution to manage workers comp costs, then you’ve found them. Contact us now. We’ll be more than happy to help you.