What You Need to Know About Workers’ Compensation

Every business owner must purchase workers’ compensation insurance. Regardless of state, having it is the law.
For those new to running their own business, workers’ compensation provides benefits to employees who get ill or injured from an on-the-job injury. The employer, in turn, gets protection from lawsuits. State laws govern the insurance, setting rates and establishing specific rules.
What Does It Cover?
For employees, workers’ comp only applies to job-related injuries and illnesses. These include:

  • Sudden accidents
  • Gradual injuries and illness, such as repetitive stress injuries and back problems.
  • Health complications related to chemical exposure and pollution.
  • Heart disease, lung disease, and stress-related digestive problems related to work conditions.

Not everything is covered, however, with the following being excluded:

  • Intoxication injuries that occur on the job
  • Self-inflicted injuries
  • Injuries from workplace fights or policy violations
  • Injuries leading to a felony charge
  • If the injury occurs off the job
  • Any injuries that occur after an employee is laid off

Who Is Covered?
Workers’ comp doesn’t provide blanket coverage; rather, it’s applicable solely to employees. The policy will not include:

  • Independent contractors
  • Volunteers
  • Business owners
  • Employees of private homes
  • Farm, maritime, and railroad employees
  • Casual workers

Which Benefits Do Employees Receive?
After a worker files a workers’ compensation claim, he or she is eligible to receive after a few days:

  • Replacement income of up to two-thirds the average wage or up to the maximum amount of benefits allowed
  • Payment to cover all medical expenses and vocational rehabilitation
  • Disability payments, including long-term or lump-sum permanent disability
  • Payment to surviving dependents if the employee dies on job
  • Compensation for permanent injuries

Unlike standard lawsuits, however, workers’ compensation does not cover pain and suffering.
What Should The Employer Know?
Along with providing coverage, you must:

  • Post, within your workplace, a notice about workers’ rights, including the name of the company’s workers’ compensation carrier.
  • When you’re notified of an injury, you must provide a claim form within 24 hours.

While this type of coverage protects your company from most lawsuits, your employees may still be able to sue in one instance: If your company operates in a reckless or intentionally negligent manner, employees may bypass workers’ comp to file a lawsuit for the full degree of damage.
To learn more about workers’ compensation policies, give us a call today at 203.729.5261.