What is Workers Compensation Insurance?
Workers Compensation is insurance purchased by an employer that provides medical and disability coverage to employees that suffer an on-the-job illness or injury. This coverage pays for medical expenses, some lost wages and even funeral expenses due to a work-related illness, injury or death.
Who Needs Workers Compensation Insurance?
According to California statute, an employer with just one employee is required to have and maintain workers compensation insurance. Some businesses, like roofers, are required to carry workers compensation insurance even if they don’t have any employees. The penalties for not carrying workers compensation coverage can be high, including fines of up to $100,000 and imprisonment for up to a year.
How Does Workers Compensation Protect Your Business?
Workers Compensation insurance protects your business in three ways:
Part 1 of the policy is called Workers Compensation Insurance, and it pays out benefits to an injured worker in the event of an on-the-job illness or injury by covering medical bills and providing disability benefits to the injured employee while he is recovering. Medical expense payments are not limited by time or dollar amount in most states (California does have a $1,000,000 limit per claim). This part also pays for funeral expenses and death benefits to the family of an employee who dies of a work-related injury or illness.
Part 2 of the policy is called Employers Liability Insurance. This part protects the employer in the event the employer is sued by the employee or survivors of the employee for negligence. The amount of this coverage is limited to the policy limit selected.
Part 3 is Other States Insurance. Some workers compensation policies can protect your business and your employees if they are injured at work out of state. This does not apply to all states, so please check with your broker for more information.
Hayes Brokers can help you determine the correct workers compensation classification for your employees and help you keep costs down when purchasing this coverage. Hayes Brokers also offers risk management services to help you with OSHA concerns, contractual obligations and safety issues at your workplace. Call today for more information and a free, no obligation quote.