Workers Compensation Insurance
providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for the tort of negligence.
WHAT IS WORKERS COMPENSATION INSURANCE?
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.
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.
Workers receive benefits regardless of who was at fault in the accident. If a worker is killed while working, workers comp (as it is often abbreviated) provides death benefits for the worker’s dependents.
WHAT INJURIES ARE COVERED?
Injuries employees sustain on the workplace premises or anywhere else while the employee is acting in the “course and scope” of employment are covered if their employer has workers comp insurance. For example, the leading cause of workers comp death claims is traffic accidents that occur when the employee is in a vehicle for work purposes, whether the trip is made in the company’s car or the employee’s own vehicle. Accidents driving to and from work are not covered.
In addition to injuries from accidents, workers comp covers injuries employees may sustain from other events that may occur while they are working, including workplace violence, terrorist attacks and natural disasters.
Workers comp insurance also covers certain illnesses and occupational diseases For example, employees who work with toxic chemicals can be made ill by exposure to the chemicals.
WHAT TREATMENT DO INJURED WORKERS RECEIVE?
Injured workers receive all medically necessary and appropriate treatment.
WHAT BENEFITS DO INJURED WORKERS RECEIVE?
Income replacement benefits are based on whether the disability is total or partial and whether it is permanent or temporary. Impairment is generally defined as a reduction in earnings capacity, sometimes using the American Medical Association’s criteria.
DO I HAVE TO BUY WORKERS COMPENSATION INSURANCE?
Employees are generally defined as people performing services at the direction of the employer, for hire, including minors and workers who are not citizens.
The threshold number of employees that triggers mandatory insurance is either three, four or five, depending on the state To avoid any unintended liability, larger companies often require any contractors or subcontractors doing work for them to provide proof they have workers comp insurance.