How Does Worker's Compensation Work?

If you own a business of any kind that has employees above a certain threshold, especially work that is physically demanding in any way, you are required to purchase workers’ compensation insurance. Though differing from state to state, the general way it works is that employees are able to be compensated for medical needs, disability, and lost wages through anything related to the workplace. Through this guaranteed compensation, employees are made to give up their right to sue the employer for thing covered in the package, namely illness or injury. Below is an explanation of what this type of insurance looks like in more detail.

Purpose

Worker’s compensation insurance is intended to protect both the employer and employees. It protects employees by providing them with medical care associated with workplace illness or injuries (regardless of fault) and promising compensation for lost wages due to missing work. Thus, even if the employee suffers because of a mistake they made, such as improper use of machinery, they will still get guaranteed care through the insurance. 

The insurance also protects employers by keeping them from the costly processes involved in being sued; their legal liability is limited. There is no cap to the number of people that can be treated under the insurance, and the employer will pay the same amount for the policy regardless.

Process

When an employee suffers injury or illness at or due to the workplace, they will report it to their employer. The employer files a claim with the worker’s compensation insurance company, and the employee receives immediate access to medical care. After a brief waiting period, usually, no more than a week, the employee is eligible to receive monetary compensation for the wages lost due to their incapacitation. However, this does not include compensation for things like injury while explicitly breaking company policy or accidents while inebriated.

Worker’s Compensation and Employer Liability Coverage

The insurance typically comes in two parts, workers’ compensation and employer liability coverage. When purchasing insurance through a reputable and reliable company, like Insurance Solutions, employers and employees have virtually complete coverage. They even offer safety and drug-free programs that can help reduce your rates, with limit extensions on coverage also available.

 The worker’s compensation is what was outlined above. However, the employer liability insurance extends a bit further. It covers the costs for legal fees that follow for injuries or illnesses not covered by workers’ compensation and also provides for the eventual settlement if one is made, though there is a cap on the amount. It also protects employers against third-party claims.

Insurance Solutions of America offers the most competitively priced workers’ compensation packages, along with many other types of insurance for businesses of all types. They can guide you in how to reduce both the number of claims you receive and also your premium through things like creating a workplace safety plan. Contact us today for help in deciding the best package for your specific needs.