Nearly every business in the U.S. that has workers must deal with the issue of workers' compensation. You'll discover that most states require employers to buy an insurance cover to fulfill their statutory obligations to employees who sustain injuries or fall ill because of workplace exposure.
Employers have a legal obligation to take reasonable care to ensure safe workplaces. Nevertheless, accidents occur and workers compensation insurance offers coverage. Here's what you should know about this kind of insurance.
What is Workers Compensation Insurance?
This type of insurance covers the rehabilitation and medical costs of your workers if they sustain injuries on the job. Usually, having insurance that handles these expenses implies that workers relinquish their right to sue your company/business for negligence.
In turn, your employees are confident that they can recover from work-associated injuries without the intricacy of a lawsuit. Bear in mind that state law governs workers' compensation and every state's system varies slightly when it comes to the details.
For instance, regulations in most states reveal whether the employer or employee can select the physician who treats the injuries and the manner in which dispute resolution is to take place.
However, the operation and structure of the overall compensation system is similar across states. The major differences lie in the rates paid to injured workers and the procedural rules employees, employers, and insurance firms must follow.
You must buy coverage as a separate policy. Although business owners and in-home business policies are available as package policies, they don't incorporate coverage for employees' injuries.
The Benefits of Workers Compensation Insurance to Your Business
Small business owners frequently think that the insurance offers minimal benefit because it's law-mandated. However, the coverage is an affordable benefit that offers protection to you and your workers.
One of the distinct features of the policy is the protection it provides you against lawsuits concerning workplace injuries. Irrespective of who is to blame, an employee can't sue his or her employee provided workers' compensation insurance exists.
In return, workers obtain insurance benefits for injuries sustained at the workplace. Bear in mind that insurance covers employees injured whether at the workplace premises or elsewhere, or in vehicle accidents while conducting business. Additionally, it covers work-associated illnesses.
Another benefit of the policy is that it offers payments to injured employees, irrespective of who is to blame for the accident. It also pays for lost time from work, rehabilitation and medical services, and offers death benefits to surviving dependents and spouses.
Revenue replacement benefits depend on whether the disability is partial or total and whether it's temporary or permanent. Most states stipulate that the injured worker receive benefits for the disability's duration.
However, some identify a maximum number of weeks, especially for temporary disabilities. The benefit amount is a proportion of the employee's weekly wage (state or actual average).
What the Policy Covers
The insurance covers injuries workers sustain on the workplace premises or elsewhere while the worker is acting in the "scope and course" of employment.
For instance, the principal cause of related death claims is traffic accidents that take place when the worker is in a car for work purposes, whether the company's or the employee's personal vehicle is involved.
Besides injuries resulting from accidents, the policy covers injuries workers may sustain from other incidents that may arise while they're working, including terrorist attacks, workplace violence, and natural disasters.
Moreover, the policy covers certain occupational diseases and illnesses contracted due to employment. For example, workers who handle toxic chemicals can become ill because of chemical exposure.
Workers compensation policy offers no-fault coverage for workers suffering job-related illness or injuries. Nevertheless, it's also designed to protect business owners against liability lawsuits and other possible costs linked to workplace accidents.
It's important you maintain the insurance in your small business since nearly every state requires it. Furthermore, your clients might not want to conduct business with you unless you have it. If you're unsure of the policy, this guide will help shed invaluable light.