How Workers Compensation Insurance Works

Employers are legally obligated to take reasonable care to ensure their workplaces are safe. Though, it's not always possible, and sometimes accidents do happen. While it is not always simple to protect your personnel from accidents and injuries, it is nevertheless possible to ensure they are protected against lost wages and high medical costs if such an incident occurs. When they do, workers' compensation insurance provides coverage.

How Workers Compensation Insurance Works

Workers’ compensation insurance is coverage that pays for employees’ medical expenses and a portion of lost pay after work-related injuries and generally shields companies from employee lawsuits stemming from these injuries.

Workers' compensation insurance pays vital benefits to employees when they are injured or sick because of their job. Workers' compensation benefits include medical treatment and ongoing care, payments to cover lost wages and even death benefits. Most states require workers’ comp insurance for companies with employees, including small businesses, though exemptions exist. Continue reading to learn more. This article will explain everything you need about Workers' Compensation Insurance.

Understanding Workers' Compensation Insurance

Workers’ compensation, commonly referred to as “workers’ comp,” is a government-mandated program that provides wage replacement and medical benefits to workers who become injured or ill on the job or as a result of the job in exchange for mandatory relinquishment of the employee's right to sue their employer for the tort of negligence. It is effectively a disability insurance program for workers, providing cash benefits, healthcare benefits, or both to workers who suffer injury or illness due to their jobs.

Employers pay for this insurance; the employee is not expected to contribute to the compensation cost. Instead, the employer's insurance provider pays weekly cash benefits and medical expenses as the Workers' Compensation Board instructs. The Workers’ Compensation Board is a state agency that processes claims. If the Board must intervene, it will decide whether the insurer will pay for medical expenses, monetary benefits, and the amounts that must be paid. No one party is found to be at blame in a workers' compensation lawsuit. Therefore, the amount a claimant receives is not affected by their negligence or the fault of their employer. However, a worker forfeits their right to workers' compensation if their accident was caused exclusively by drug or alcohol intoxication, malicious intent, or both.

The claim will be compensated if the employer or insurance provider accepts that the illness or injury is work-related. Only monetary benefits are awarded if the employer or insurance provider contests the claim once the workers' compensation law judge determines who is correct. A worker may be qualified for disability benefits in the interim if they are not already getting benefits because the employer or insurance provider claims that the injury is unrelated to the person's job. However, any amounts paid through the Disability Program will be deducted from subsequent payouts under the workers' compensation system. If you can work again but cannot earn the same salary as before due to your injury, you may be eligible for a benefit that will cover two-thirds of the shortfall. Before fully recovering, you may return to work on a light or alternate duty schedule.

Workers' Compensation Insurance Benefits