Worker’s Compensation Insurance: What It Is And What Does It Cover?

Worker's Compensation Insurance: What It Is And What Does It Cover?

I don’t need workers’ compensation insurance. I have only a handful of employees! That’s what many say! But do you know that law abides you to have a workers’ compensation insurance policy even if you have a single employee? But trust me, it is in the best interests of both the employer and employee!

In simple words, a workers’ compensation insurance gives both the employer and the employee coverage in case an employee gets injured or is disabled on the job. It is also known as workers’ comp insurance and is a win-win for both employers and employees.

Let’s see how!


# Protecting Employees 

It protects the employees by giving them monetary benefits in workplace injuries. For example, suppose you are a truck driver and get injured in a traffic accident while working. This policy can help you pay your medical bills. Therefore, saving you from a hefty medical bill.


# Protecting Employers

It protects the employer as this insurance policy covers the legal and medical costs that it would have to pay its employees out of pocket in case of any mishap.

Thus becoming a win-win situation if you ask me. But is it really? Read further to find out.


Benefits of a Workers’ Compensation Insurance

  1. If you are a small business, paying medical expenses for your employees out of pocket can get very difficult. Even a broken leg can prove to be a nightmare. With worker’s comp insurance, you safeguard your employees and business from such heavy losses.
  2. Suppose you did not have worker’s comp insurance. In that case, your employees could file a lawsuit against you for not preventing a workplace accident, resulting in thousands of dollars getting lost in attorney fees, court costs, and settlements.


Limitations of a Workers’ Compensation Insurance

No solution is perfect. Below are a few limitations of a workers’ compensation policy.

  • Sometimes, employers contest the compensation request. In such cases, years can fall short, and the injured worker might have to wait years to get its final settlement and bear the legal fees as well.
  • At other times, workers fabricate or exaggerate an injury to receive worker’s compensation. This accounts for fraud, and despite strict legal actions in place against such frauds, they still happen.
  • The State laws require employers to provide this insurance to every employee. However, often employers hire workers off the book. Hidden from the state’s eye, these independent workers don’t get any benefits in a workplace injury.


What Does Workers Compensation Insurance Cover?


#1: Medical Expenses

Workplace injuries can cost you a fortune! From emergency room visits to surgeries and prescriptions… the list is never-ending. They can all pile up to a substantial medical bill. But this insurance can help an employee pay their medical bills if injured while on the job.

For example, if one of your employees got severely injured while working on a machine, he can get his bills paid by this insurance. But suppose the injury was because of his negligence (e.g., he was intoxicated). Will he still get the benefit under this insurance?

The topic is debatable and will probably go to court for a decision. Difference Between General Liability And Worker’s Compensation Insurance.


#2: Missed Wages

Suppose you are a nurse who cared for critical patients during the coronavirus pandemic. What if you contracted the virus and can’t work anymore? Well! The comp insurance is going to cover your medical bill and provide you with a salary while you are unable to work.

Compensation of lost wages is a highly beneficial feature of worker’ compensation insurance as it safeguards the interests of workers who survive paycheck to paycheck.


#3: Ongoing Care

Severe diseases and injuries can take longer to heal and pose a threat to both the employee and employer.

For example, a worker in the mining industry could suffer from long-term silicosis (a disease caused by inhaling silica from mines).

Such workers may need regular doctor appointments and physical therapy to heal over the years. Comp insurance covers such ongoing care too.


#4: Illnesses

As discussed above, there are some illnesses that workers can contract while working in specific industries. Healthcare industry workers could easily acquire a contagious disease. At the same time, workers in a nuclear plant could easily contract cancer-related diseases.

Suppose employees get sick while on the job; workers’ compensation insurance can cover their illness. It can help them gain financial aid for their treatment and care.


#5: A Repetitive Injury

They are also known as overuse injuries. A repetitive injury in the workplace means an injury that develops over time by doing the same relative work every day. An excellent example of such an injury is carpal tunnel syndrome.

Carpal tunnel syndrome is a common workplace illness. It is a condition where pain and numbness develop in your hands over time. It is most common in IT workers who constantly sit and work on computers. Your median nerve (the main nerve in your wrist) becomes numb over time, and it eventually damages your ligaments, causing wrist injury.

Another repetitive injury is back pain due to lifting heavy boxes. All such injuries are easily covered under workers’ comp insurance.


#6: Disability

Workers in the automobile industry often hurt their hands by getting them inside machines due to technical errors leading to becoming disabled. While its unfortunate and nothing can account for their loss, compensation insurance can at least pay for their medical bills and wages lost.

The amount and length of such insurance coverage varies and depends on your state laws. This amount could also train disabled employees for some other jobs. For example, a worker who lost his leg could be re-trained for doing a desk job. Insurance coverage will cover the cost of re-skilling such employees.


#7: Funeral Costs

In an unforeseen situation, an employee could lose his life during work hours. For example, unfortunately, an Amazon delivery person can have a fatal car crash. Workers ‘ compensation insurance can bear the cost of such critical conditions.

In such a situation, the insurance provides funeral costs and some financial benefits to the employee’s family.  


In A Nutshell…

A workers’ compensation insurance is a good way of offsetting the extra costs you will have to incur for your employees. It is also safeguarding you from getting sued by workers. Moreover, it is mandatory by law.

So what are you waiting for? Get your hands on a good workers’ insurance policy as soon as possible.

So, I am wrapping up my discussion on this topic with a thought for you,

” To win a marketplace, you first have to win your workplace. ” – Doug Conant

If you have any suggestions or questions, please drop them in the comment box. Also, let me know if you have bought a workers’ insurance policy. Is it offering you all the benefits listed in the article?

Let’s discuss!

I am all ears!