The truth is, it’s difficult to prevent every possible accident, illness or injury from happening on the job. No matter how cautious you and your employees may be, or how safe your workplace is, eventually, you’re likely going to have a workers’ compensation claim on your hands.
Are you prepared?
Take a look at some frequently asked questions below. Then speak with your independent insurance agent to learn how workers’ compensation insurance coverage can be used to protect your business and your employees.
What is workers’ compensation?
In the 1800s, the increase in industry led to a surge in workplace accidents and injuries. Since the only way to be compensated for work-related injuries was to sue the employer for negligence, in the early 1900s, states proposed legislation to support injured workers. These laws ruled that, in the instance of workplace injuries, employers would provide financial support for medical care in exchange for the employee’s right to sue.1
Workers’ compensation insurance was created to provide financial protection to business owners as they fulfilled their financial obligation to injured workers.
Thus, workers’ compensation (or “workers’ comp” as the kids call it these days) was born.
What situations does workers’ comp cover?
It depends on where you live. Each state controls its own workers’ compensation laws and regulations. This includes determining the amount of employee benefits, what injuries are covered and how claims are handled.
Across the board, workers’ compensation covers costs associated with injuries employees acquire while acting within the “course and scope” of their work, no matter who is at fault. The policy covers medical payments, as well as indemnity payments, which are costs to replace the injured employee’s lost income.
It also covers work-related illnesses and diseases, such as a construction worker’s hearing loss from being repeatedly exposed to loud noises.
In addition, workers’ compensation protects employers in the instance that the injured worker files a lawsuit for a workplace injury or illness that isn’t specified in state regulations.
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Does my business REALLY need a workers’ compensation insurance policy?
Absolutely. First, it may be required by law, depending on which state you live in and how many employees you have. Second, workers’ compensation helps protect businesses from financial detriment. A workers’ compensation claim could potentially cost your business thousands of dollars, and financial protection is key to keeping your business thriving.
Also, carriers may offer additional benefits with your policy, such as risk control services, a preferred medical provider network or fraud prevention investigative services.
How do I get a workers’ compensation insurance policy?
States decide if workers’ compensation is provided solely by state-run insurance agencies, or if private insurance carriers can offer coverage as well. So, to start, check out your state’s workers’ compensation website to determine its regulations.
You can also give your independent agent a call. Your agent can help you determine the regulations for your state, answer your questions and potentially give you a quote for a workers’ compensation policy.
Coverages described above may not be available in all states. Please contact a local independent Grange agent for complete details on workers’ compensation coverages, additional benefits and discounts. If the policy coverage descriptions in this article conflict with the language in the policy, the language in the policy applies.
Reference
1 - Insurance Information Institute