Even in the most innocuous workplaces, potential dangers are everywhere. A consultant could trip over a rogue computer cord. Your firm’s technical writer could develop carpal tunnel syndrome. Accidents and injuries can happen to anyone, which is why most states require employers to create a safe work environment. This includes having Workers’ Compensation Insurance.
Workers’ Compensation Insurance (also known as “Workman’s Comp” or “Workers’ Liability Insurance”) provides coverage for your employees’ workplace injuries. It may cover…
- Medical and rehabilitation expenses.
- Lost wages during recovery.
- The cost of hiring a temporary employee to fill in.
- Funeral or disability expenses (if a work injury or illness leads to death or permanent injury).
- Support payments to dependents.
- Your legal defense fees if an employee decides to waive their benefits and sue your business over their injury instead.
Generally, an employee with a work illness or injury can receive Workers’ Comp benefits regardless of who was responsible for the incident (e.g., the employee, the employer, a coworker, or a customer). As long as the injury is job-related, your insurance benefits can cover your employee’s medical bills and work-injury unemployment expenses. This can include injuries that happen while on business trips, running work errands, or attending a professional social function.
Over the next several blog posts, we’ll explore the unique facets of this insurance in more detail. But for now, keep reading for an overview that answers some frequently asked questions about Workers’ Comp.
Do I need to cover all employees with Workman’s Comp?
Generally speaking, yes. Most individuals providing services to a for-profit business are considered employees under Workers’ Comp laws and must be insured. However, these stipulations vary based on where your business is located. For example, some states don’t require you to cover farm workers, domestic employees, and seasonal or casual workers. But if you employ full- or part-time employees or subcontractors, know that most states require you to provide adequate Workers’ Comp coverage.
Which occupational injuries and illnesses are covered?
Workman’s Comp covers most occupational injuries and illnesses, but there are some exceptions. Benefits may be denied in situations involving…
- Injuries that happened while the employee was intoxicated.
- Self-inflicted injuries (e.g., an employee who starts a fight and gets wounded).
- Injuries suffered while an employee was not working.
- Illnesses unrelated to the employee’s work (e.g., hereditary diseases).
- Injuries suffered while an employee was violating company policy.
Can an employee collect Workers’ Liability benefits and sue me?
An injured employee can only sue you if they waive their Workers’ Comp benefits offered by your business. If they do sue you for punitive damages, pain and suffering, and / or mental anguish, your Employer’s Liability Insurance (included in most Workers’ Compensation plans) will cover your business’s legal expenses.
Why do I have to carry Workers’ Comp?
Unlike other small business insurance policies, Workers’ Compensation Insurance is regulated at the state level. So while you may be able to (legally) forgo General Liability Insurance, chances are that if you have employees, your state requires you to carry Workers’ Compensation coverage. Failure to adhere to your state’s Workers’ Comp laws can lead to extensive fines, and in some states, criminal charges.
Which states require employers to carry Workers’ Compensation Insurance?
All states require employers to have Workers’ Comp coverage except for Texas. For some states, the mandate doesn’t kick in until you hire a certain number of employees (e.g., in Florida, you must carry coverage if you have four or more employees). In other states, you must have the coverage in force if you hire a single employee (e.g., California). To learn more about your state’s regulations, check out our guide Workers’ Compensation Insurance Laws by State.
Where can I purchase Workers’ Comp Insurance?
Some states run monopolistic insurance pools, which means you must purchase your Workers’ Comp coverage through the state fund (as in Ohio). Other states give you the option of purchasing from their fund or a private insurance company.
For more information about the cost of Workers' Compensation Insurance, read our Workers' Comp Insurance Quote Analysis. Or if you're ready to see your options, apply for quotes from insureon today. Our agents can help you find coverage that meets your state’s requirements.
This post is part of an ongoing series on Workers’ Compensation Insurance and the high cost of occupational injuries. Stay tuned for more on how to handle work injury claims, adhere to state Workers’ Comp laws, and find affordable coverage!