Worker Compensation Insurance
Workers’ compensation insurance, sometimes referred to as workers comp insurance or abbreviated as WCI, is a type of insurance that provides financial protection for employees who are injured or become ill while on the job.
For the most part, workers compensation insurance is required by law in all U.S. states, though workers comp insurance laws vary from one state to the next.
Businesses that operate in multiple states are likely to experience different workers’ comp insurance requirements in each state in which they operate.
What Does Workers Compensation Insurance Cover?
Workers comp coverage offers a blanket of protection for employees who are injured or become ill while on the job in the following ways:
- Paying for initial medical treatment in the aftermath of the injury or illness.
- Replaces some of the employee’s lost wages while going through the treatment and recovery process.
- Covers the costs of rehabilitative treatments and therapies.
- Pays for ongoing treatment as long as the effects of the illness or injuries continue.
If the employee dies as the result of on the job injuries or illnesses, workers comp insurance provides death benefits as well.
Is Workers Comp Insurance Necessary for Small Businesses?
Workers comp insurance for small businesses is more important than many owners realize. Even in states that do not require all small businesses to purchase workers compensation coverage for employees, the need remains for the protection it provides the company.
Most people think of WCI as a type of insurance protection that protects the workers of a business, which it does. But, it also protects the company from costly and potentially devastating lawsuits that would otherwise arise in response to workplace injuries, illnesses, and deaths.
Because workers’ compensation insurance provides financial support for the medical expenses and lost wages employees experience as a result of these injuries, it isn’t necessary for them to seek legal avenues to help them, and their families, survive the recovery process.
It also prevents them from pushing to return to work before they are fully recovered to perform their jobs properly, which helps your entire organization.
One other aspect of workers comp coverage many businesses fail to recognize is the impact it has on employee morale. When employees know they are protected if something goes wrong, they reward businesses in the following ways:
- Better engagement in their duties
- Higher presenteeism
- Improved organizational loyalty
All of these things are good news for your small business.
Is There Workers Comp Insurance for Self Employed?
This is another protection that has different rules from state to state, but it does exist. Self-employed contractors in certain industries, such as construction, need this type of protection in case they are injured while working on a job site or become ill by breathing in toxic chemicals or debris.
Workers compensation for self-employed professionals offers the same protection and confidence you would experience as an employee. You will get assistance for lost wages, medical care, and rehabilitation treatment, and your family will receive death benefits if you die as a result of your injuries or illness.
Whether you’re completely self-employed or work as an independent contractor, individual workers comp insurance can be a lifesaver if you are hurt on the job and need medical care, especially since many independent contractors do not have medical insurance coverage.
It also helps to ensure that you have income coming in while you are recovering, helping to reduce the risks of further injuries by returning to work too soon.
What Doesn’t Workers Comp Insurance Cover?
Workers comp insurance is an excellent tool for managing expenses after accidents and injuries occur.
There are some exceptions, however, including these:
- Injuries occurring outside of work
- Intentional injuries
- Injuries occurring while commuting to and from work
- Injuries occurring as a result of intoxication or substance abuse
It is important for employers and those who are insuring themselves for workers’ compensation to understand these exclusions.
Things You Need to Know about Workplace Safety and Workers Compensation Insurance
Each state has its own laws related to workers’ comp coverage. Check with Coverage Specialists before choosing workers compensation protection so you can be certain you’re not missing key coverage for your business.
These are some things that you need to know.
- The National Safety Council states that the average claim for workplace injuries costs $36,551.
- In 2017, there were more than 2.8 million non-fatal workplace injuries, according to the U.S. Bureau of Labor Statistics.
- In the same year, there were more than 5,000 fatal workplace injuries.
You can’t afford to take chances with your business by not having the right kind and amount of workers compensation insurance protection for your employees.