As an employer, it is important to understand workers’ compensation guidelines so you can be sure your company is in compliance with the law. It is also wise to learn about this type of coverage so you can maximize its benefits for your business. Below is an employer’s guide to workers’ compensation insurance intended to provide answers to some of the most common questions.
What is workers’ compensation and how does it work?
Workers’ compensation insurance is an insurance policy that pays benefits when one of your employees becomes ill or gets injured on the job. Workers’ compensation benefits are available to your employees regardless of who is at fault for the accident. The purpose of this insurance is to protect both employees and employers. Employees are able to receive the benefits they need even if they cannot prove that the employer is at fault, and employers will deal with fewer lawsuits. In most states, it is even illegal to sue an employer for an at-work injury in most circumstances. However, exceptions may be made in extreme cases, such as cases where the employer caused the injury intentionally.
Following an injury at work, the injured employee typically notifies the employer and receives a claim form. When a claim is filed, the employee may receive benefits under the policy to cover medical treatment, rehabilitation expenses and a portion of lost wages. Workers’ compensation insurance may also provide liability coverage to provide protection in the event that an employee is able to file a lawsuit against the employer. Workers typically receive benefits until they are able to return to work.
In some cases, workers’ compensation claims may be denied. When this occurs, the employee will often appeal the denial.
When is workers’ compensation insurance required?
Workers’ compensation laws vary by state. However, most states require the majority of employers to invest in this type of insurance coverage. While some states mandate workers compensation insurance for any employer who has more than one employee, others require workers compensation insurance only for employers with a higher number of employees. Some states also provide exemptions for employers who operate companies within select industries, such as agriculture. Even in cases when workers’ compensation insurance is not legally required, it may still be in your best interest to purchase a policy to protect your company in the event of an employee injury, illness or death.
Some of your workers may be exempt from workers’ compensation coverage. For example, if you work with independent contractors, you are not typically required to purchase workers’ compensation insurance for these individuals. Workers’ compensation insurance is not typically required for volunteers either.
Workers’ compensation premiums vary based on a variety of different factors, including your industry, the nature of your business and your claims history. Thus, you may be able to reduce your workers’ compensation premiums by reducing the number of accidents at work. In some cases, different insurance providers may also offer workers compensation insurance at different rates.
Key Takeaways
- For most employers in the United States, workers’ compensation insurance is required by state law. Even when this insurance is not required, it may still be a wise investment.
- Workers’ compensation insurance pays benefits when an employee is injured on the job or falls ill. These benefits cover medical expenses and lost wages.
- Workers’ compensation insurance rates vary based on a variety of factors, including your business’s industry and workers’ compensation claims history.
Marine Agency provides workers compensation insurance to businesses in most states, except North Dakota, Ohio, Washington and Wyoming. Please contact us today to learn more.
