Workers Compensation Insurance
Workers’ compensation insurance provides medical and wage benefits to people who incur injury or become ill at work. It is a mandatory coverage in a majority of states and the wage and medical benefits vary by state. Thus, most businesses that employ workers have an obligation by law to purchase workers’ compensation coverage. Moreover, Employers are legally obligated to take reasonable care to assure that their workplaces are safe. Nevertheless, accidents happen. When they do, workers compensation insurance provides coverage. Additionally, workers compensation insurance serves two purposes: It assures that injured workers get medical care and compensation for a portion of the income they lose while they are unable to return to work and it usually protects employers from lawsuits by workers injured while working.
Benefits Of Workers Compensation Insurance
State laws determine the benefits that are affordable to injured workers. States are fairly consistent in the types of benefits they provide. These generally include:
Medical: Includes medical expenses for doctor, hospital and nursing care, medications, diagnostic tests, physical therapy, and medical equipment.
Disability: Provides partial reimbursement of wages lost during a temporary or permanent disability. The disability may be total or partial.
Rehabilitation: Provides vocational training for workers who must change occupations due to their injury.
Death: Pays death benefits to the surviving spouse and minor children of workers killed on the job.
Who needs Workers Compensation Insurance?
Not every business requires to purchase workers’ compensation insurance. Generally, sole proprietors and partnerships do not require this insurance unless they have employees who aren’t owners. Moreover, most states will allow sole proprietors and partners to cover themselves for workers’ compensation if they choose to, but it is not a requirement. Additionally, all states with a small number of exceptions require businesses with employees who are not owners, to purchase workers’ compensation coverage for those employees. On the other hand, in states that need Workers Compensation, businesses that fail to provide workers’ compensation coverage can face severe and costly repercussions. That includes payment of claims out of pocket, fines and possible imprisonment, as well as possibly losing the right to conduct business in the state.
Tips to Reduce the Cost
- Determine if you’re in an assigned risk plan
- Check what credits may be available to you in your state.
- Insist on getting audit work papers after any audit.
- Discuss safety at every opportunity.
- Examine trends in workplace injuries.