Getting business insurance is crucial for general contractors. This is because…
Workers’ compensation insurance protects employees who are injured or killed at work by compensating for their medical expenses, disability, death, and rehabilitation costs. When carrying this insurance policy as a business owner, your insurance provider would agree to incur all relevant expenses and benefits as per your state’s workers’ compensation laws.
Workers’ compensation is known as a type of social insurance because it implies a social contract between management and labor where you would be protected from any lawsuits that a worker injured on the job may file against your business. Majority of states in the US mandate businesses with workers who are not owners to purchase workers’ compensation coverage.
Workers Comp Coverage
Workers’ compensation insurance offers benefits to employees who get injured or fall ill at work. It also takes into account other elements like missed wage replacement, death benefits, etc.
A major advantage of opting for a workers’ compensation policy is that it decreases your liability for work-related injuries and sickness. If you do not carry this policy, an employee may sue your company for a work-related sickness or injury to pay for their medical fees or lost wages. Workers’ compensation policy takes into account:
Your insurance provider pays for an employee’s medical expenses incurred as a result of injury or illness at work. The expenses can include emergency room visits, related surgeries, and prescriptions. For instance, if one of your electricians gets their hand injured at a client’s home, this insurance policy can help pay for their hospital visit.
Workers’ compensation insurance compensates for lost wages if your worker needs time to recover from an injury or illness contracted at work. For example, if a worker accidentally trips and fractures their arm at work and is unable to work for 2 weeks as a result, workers’ compensation insurance can compensate for lost income.
Work-related injuries may need more than one kind of treatment. If an employee injures their back while lifting heavy equipment, workers’ compensation insurance can pay for their ongoing medical expenses.
At times, the working environment can expose your employees to harmful allergens or chemicals that can result in illness. In case a worker falls ill due to a work-related incident, this insurance policy can pay for the relevant treatment and ongoing care.
Injuries at work are not always related to a sole incident. Repetitive injuries may take months or years to manifest. For example, if your receptionist is diagnosed with carpal tunnel syndrome due to years of typing with bad ergonomics, workers’ compensation insurance can take care of the treatment and relevant care expenses.
At times, injury at work can be intense enough to result in a permanent disability. For instance, an employee at work loses one of their legs in a work-related accident. In this case, workers’ compensation insurance helps pay the medical fees and also replace an employee’s lost salaries.
If a worker dies due to an unfortunate accident at work, a workers’ compensation insurance policy can cover the funeral costs and even offer death benefits to the worker’s beneficiaries.
What’s Not Covered?
While workers’ compensation insurance is comprehensive, there are certain aspects it may not take into account.
Commuting To and From Work
For starters, there is a “coming and going”, according to which injuries contracted while commuting to and from work are not covered by the insurance policy. For example, if an employee meets with an accident on your way to work in the morning, the injury will not be compensated by the workers’ compensation insurance policy.
However, if the job specifically involves driving or if you do not have fixed work premises. In case an employee suffers from a work-related injury inside the vehicle while driving during working hours, a workers’ compensation insurance would naturally cover the costs of such an incident.
Workers’ compensation insurance often does not compensate for injuries sustained or illness contracted at work at social events such as happy hours or team building events. So if your company often organizes recreational activities, make sure all safety precautions are taken into account.
However, an injury during a recreational even may be covered if:
- The attendance of the employee was mandatory, or believed to be required.
- As an employer, you benefited from the employee’s attendance (for instance, if the even involved a brainstorming session or presentation).
- The event took place during business hours on the company premises.
Intoxication or Substance Abuse
An injury that is linked to intoxication or substance abuse is also not covered by workers’ compensation insurance. For instance, if a worker falls from a ladder while drunk, a workers’ compensation claim is likely to be denied.
However, if you can prove that the injury was unavoidable or not your fault, you may end up receiving compensation. For example, if a worker struck you from behind with a lift truck while you are working on a factory line, you may receive benefits even if you were intoxicated.
Benefits of Workers’ Compensation Insurance
As a business owner, the safety of your employees at work is your responsibility, and you may be held answerable if an employee falls sick or gets injured at work. This makes carrying workers’ compensation insurance crucial as well as beneficial. Here are some of the major advantages of this insurance policy:
Legal Liability Coverage
When workers’ compensation insurance was first introduced, it was designed to act as a bargaining position between employers and employees. Back in the day, business owners used to pay for all legal costs related to worker injury on the job.
These days, the legal and medical costs of such an incident can be massive, and may even result in the closure of business. Workers’ compensation insurance offers a much needed legal liability coverage for a business in the event of an injury or illness at work.
Cover Against Occupational Illnesses and Conditions
At times, illness can be a direct result of the nature of the job. For example, working with harmful chemicals may lead to the development of respiratory conditions such as asthma or bronchitis.
Occupational illnesses may have a detrimental effect on a worker’s productivity and quality of life. If you are carrying workers’ compensation insurance, you can help your worker save money on medical fees and facilitate them in maintaining their productivity.
Vocational Rehabilitation Expenses
A significant benefit of workers’ compensation insurance is that it offers coverage for training expenses. In some situations, a worker may sustain an injury on the job as a result of which they may not be able to work in the same position any longer.
If this is the case, workers’ compensation insurance can pay for the cost of training that employee for a different position within your firm or obtaining employment in another company.
Compensation for Lost Wages
Workers’ compensation insurance not only covers the cost of treating injuries, but also incurs the cost of partial or total disability of an employee. If the disability is partial, the employee may only be unable to work for a short while.
In this case, your insurance provider would be responsible for the wages lost. It generally offers coverage for 50% of the worker’s usual salary while they are temporarily disabled.
Workers’ Compensation Insurance: FAQs
You probably aim to conduct business operations as safely as possible. However, an unforeseen incident, such as an injury or illness of a worker on the job, may still occur. Here are answers to some of the frequently asked questions about workers’ compensation insurance:
What should I do when a worker is injured at work?
When an employee sustains an injury, assist the injured and take steps to ensure the safety of other workers. Contact emergency medical services if more than basic first aid is required. Once the situation is under control, speak to witnesses and note down details regarding the incident.
Does workers’ compensation insurance take fatal accidents into account?
Yes, workers’ compensation policies usually include death benefits. Your insurance provider may help a worker’s loved ones to pay for the funeral and burial expenses following a fatal accident on the job. This policy can also provide financial assistance to family members of the deceased worker.
Does workers’ compensation insurance offer coverage for employees who have contracted COVID-19?
This generally depends upon the location where an employee has contracted the disease. The insurance policy only safeguards employees from on-the-job injuries and illnesses. A workers’ compensation policy may provide compensation if an employee contracts COVID-19 while at work.
What should an employee do if they are hurt on the job?
If an employee is injured at work, they should contact their supervisor as soon as possible. When reporting the injury, it is important to mention the time, date, and circumstances of the injury. States usually have different requirements as to when an injury should be reported, but it is best to do so immediately.
How do I file a workers’ compensation claim?
It is crucial to file a workers’ compensation claim immediately. You are eligible for filing a claim if:
- The injured person works for your company.
- An employee falls sick due to the nature of work.
- Employee injury is a result of job-related duties.
- An employee sustains an injury at the workplace.
If your employee gets hurt at work, ensure that they receive proper medical care. If required, call an ambulance to transport them to the emergency room. If recovery implies taking time off from work, grant them the permission to take leaves.
How do workers’ compensation settlements work?
Your insurance provider will typically offer a coverage amount after a claim. However, if the injured employee is not satisfied with the compensation, they can opt for a settlement with an attorney’s assistance.
The worker, attorney, and the insurance provider would then negotiate to arrive at an amount that all parties agree to. As an employer, make sure you are updated with the developments to minimize the chance of a lawsuit.
Can a workers’ compensation claim be filed if an employee already had a medical condition, which aggravated due to the accident?
Yes. Nevertheless, there would be a need to prove that the deterioration of the condition was especially due to the nature of the job or environment at the workplace. For instance, if an employee has a history of back pain and hurt their back at work, they would need to show that their condition worsened due to work.
Is an employee eligible for workers’ compensation insurance if the accident was their fault?
Part of the purpose of workers’ compensation insurance is to offer benefits to injured employees without considering who is at fault. Nevertheless, there are some cases in which an employee may not receive benefits. For example, the insurance policy does not take into account self-inflicted injuries or injuries that are sustained by an employee under the influence of alcohol.
When you are carrying a workers’ compensation insurance policy and have an employee who gets injured or sick at work, it is vital to file a claim. It would help your worker with the medical and ongoing care expenses for recovery. A workers’ compensation policy can also save you from legal expenses in case a worker sustains and injury and files a lawsuit against your company.