Workers' Compensation Insurance

Thousands of employees contract work-related illnesses and sustain work-related injuries every year, and many of these illnesses and injuries are significant. Many require medical treatment, and some prove to be fatal. Workers’ compensation insurance is a form of insurance that helps both employees who suffer work-related illnesses or injuries, and their employers. Employers can often be held responsible for illnesses and injuries that employees suffer while on the job. In many cases, an employer may be asked to both cover an employee’s medical bills and provide compensation for the employee’s lost wages. Workers’ compensation insurance helps businesses prepare for this potential risk. The insurance offers coverage for employees who become ill or injured while at work, usually covering both medical bills and a portion of wages that are lost due to the illness or injury.

Who is covered by workers’ compensation policies is usually determined by people’s relationship to a business. Employees are usually covered regardless of their position or how many hours they work, owners may be covered depending on how involved they are with the business’ daily operations, contractors normally aren’t covered, but there are a few uncommon scenarios where they might be covered, and vendors and customers generally aren’t covered by workers comp insurance. Exactly who is covered by a particular business’ workers comp insurance is determined by the laws of the state the business operates in and the terms of the business’ workers’ comp policy.

Most businesses that have employees should consider getting workers’ compensation coverage, for few businesses could afford a major work-related illness or injury claim. In many cases, businesses that have employees are required by state law to obtain coverage.

Carrying workers’ comp insurance usually doesn’t make it impossible for employees to sue over worker-related illnesses or injuries, but it greatly deters them from filing such lawsuits. At the time that employees file a workers’ comp claim, they usually waive their right to sue over the incident. Thus, employees normally can’t both file a claim and sue their employer. While employees can theoretically sue employers over work-related illnesses and injuries, the vast majority of employees who become ill or injured on the job choose to file a workers’ comp claim instead. They usually do this because filing a claim is fast and promises fair compensation, and lawsuits can be uncertain ventures.

Workers’ compensation premiums are based on a number of different factors. A few of the items insurers may consider when underwriting policies include size of a business’ workforce, average salary of a business’ employees, industry a business operates in, and past claims history of the business.