What Workers' Compensation Doesn't Cover
For most businesses with employees, Workers’ Compensation Insurance is a must-have. In fact, it’s usually the law. It provides a monetary safety net for worker injury, helping businesses pay for employee medical bills and rehabilitation costs when a workplace accident happens.
But it doesn’t cover every expense related to worker injury, and it’s not a catchall solution to all your safety concerns. Let's review what Workers’ Comp doesn’t cover so you aren't surprised later on.
1. Wages for a Replacement Employee
When a valuable employee is the victim of a workplace accident, they might be off of work for a while. A hurt back is enough to keep a person home for a few days, and you might manage without the employee for that time. But severe injuries can take months to recover from, and the world doesn’t stop turning for an injured employee.
In the interim, you may need to hire a temporary replacement worker to keep your business moving. Keep in mind, though, that Workers’ Comp doesn’t cover the replacement employee’s wages. That responsibility is on you.
The good news? Workers’ Comp pays for two-thirds of the injured worker’s wages, so you won't pay double during this time. For more on that, see “What Do Workers’ Comp Benefits Cover?”
2. Funds to Improve Workplace Safety
As a small-business owner, it's your responsibility to make a safe work environment for your employees, and that means you must mitigate dangerous conditions before they lead to injuries. For example, you may need to invest in safety equipment and training to ensure your employees have the gear and skills to do their work safely.
Even if an employee is injured in an accident, Workers’ Comp doesn't provide funds for you to improve workplace safety. It's best to take care of safety issues proactively to avoid a claim from the outset.
3. OSHA Penalties
You're responsible for maintaining workplace safety, but OSHA’s job is to make sure you’re following through on that responsibility. Failure to follow federal safety standards can result in hefty penalties if OSHA inspects your business. Workers’ Comp doesn’t offer any coverage for paying those fines, even if an OSHA violation caused the employee injury.
4. Third-Party Damages
In especially unfortunate circumstances, a third party, such as a customer, client, or passerby, could get caught in the same accident that injures your employee. Maybe an out-of-control backhoe swings its shovel into a random car. Maybe a heavy box falls on a customer when the employee carrying it slips on a puddle.
In these instances, Workers’ Comp only covers the costs associated with your employee’s injuries. For the third party’s injuries, you need General Liability Insurance. General Liability can cover their medical bills and pay for your legal expenses if they try to sue you over the injury.
5. Get-Well-Soon Cards
It’s always a good idea to let an injured employee know that you haven’t forgotten about them. Sending cards or simply calling them up to see how they’re doing is a good way to rebuild their trust.
Just remember that get-well-soon gifts aren't covered by Workers' Comp, which is probably a good thing. Greeting cards should never require paperwork!