WORKERS COMPENSATIONWhat Is Workers Compensation Insurance?
Workers Compensation Insurance is a state-supervised program to protect employees who are injured or become disabled from work-related accidents, occupational diseases or related accidents. Benefits may include weekly compensation for income loss, and payments to cover medical and rehabilitation costs. Coverage can be obtained through state insurance pools, self-insurance, or an insurance company.
Who Needs Workers Compensation Insurance?
That depends on your state and number of employees. Currently, all states except New Jersey and Texas have mandatory participation for companies with a certain minimum number of employees. In New Jersey and Texas, participation is voluntary. Most states exempt employers with less than four employees. To make sure you are in compliance with the law, contact the appropriate office in your state.
How Does It Work?
Most states have Workers Compensation insurance pools. You can also obtain coverage from an insurance company. Some large businesses elect to self-insure. Benefits vary from state to state, but are only paid for work-related losses, generally including the following:
- Income replacement for partial or total disability, whether temporary or permanent
- Medical and rehabilitation costs
- Survivor benefits in the event of a fatal injury or illness
Why Should I Find Out More?
If you are required to participate but don?t, you may face fines, imprisonment, and other penalties. When part of a disability program, Workers Compensation can help make your company's disability planning easier, as costs are predictable. Since benefits are generally uniform, you should compare costs, using your state pools numbers as a baseline. Depending on your company's situation and accident history, your type of business and number of employees, you should find a choice that fits your needs.
Workers Compensation Insurance at Work:
Darcy runs a catering business with five full-time employees, whom she also considers her friends. When she learned she had to provide Workers Compensation Insurance, she saw it as one more annoying expense. Her feelings changed after a kitchen accident seriously injured two of her employees. While they were on disability, they received half their normal pay in benefits and all their medical expenses were covered. Darcy realized that, without Worker's Compensation, she could not have paid them while they were out. Because of her coverage she didn't?t have to bear extra costs, her employees were compensated, and the work and personal relationship remained intact.
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