The main purpose of worker’s compensation is to protect businesses and employees in their workplaces. Although various safety measures are always put in place, it is also important to have insurance that covers employees against any unforeseen injuries.
Insurance benefits are given to an employee in case he is injured in the form of medical bills and monetary compensation. In case a worker dies in the line of duty, his or her family members can also receive death benefits form the insurance company.
Below are 5 things your business needs to know about workers’ compensation:
1. Workers’ compensation protects everyone
Under workers’ compensation, everyone in your business is covered. It doesn’t matter whether you have just five employees or 100, the insurance company will cover all of them. Besides that, you can also use worker’s compensation insurance to cover for disability, medical expenses, and potential income loss.
Worker’s compensation covers all employees including those on part-time, full-time, and those employed on a contract basis.
2. Each state has its own laws
Every state has different laws with regard to worker’s compensation. That means the benefits an employee gets may be very different from the benefits an employee in another state receives. Most states have management boards that are responsible for the formulation of policies and oversight concerning worker’s compensation.
They are the ones that decide how much insurance companies are supposed to charge employers for worker’s compensation. Most states make it mandatory for employers to have worker’s compensation.
3. Worker’s compensation is meant to protect employers from lawsuits
Another major purpose of worker’s compensation is to protect businesses from lawsuits. It is actually the best type of insurance you can get. If you own a small business, a single lawsuit can easily bring your operations into a crashing halt.
Before the introduction of worker’s compensation, employees would easily sue their employers and claim huge amounts of money in the form of damages. But with worker’s compensation, an employee’s right to sue is waived.
Although worker’s compensation doesn’t offer 100% liability against lawsuits, it can assist your business to absorb the impact of lawsuits.
4. Employees are supposed to be compensated on medical bills and lost wages
In case an employee gets injured while working, the insurance company is supposed to cater to all the medical bills associated with the injury. In most cases, the insurance company in consultation with you agrees on the hospital where the employee will be treated.
If the employee decides to be treated in a different hospital from the one recommended, then they will have to foot the medical bill.
Besides, the insurance company will also have to pay a certain percentage of the employee’s salary in case they are unable to work because of the injury. For instance, the insurance company may decide to pay 40 percent of the salary while you pay for the rest.
5. An employee can file for a claim even if they are partially at fault
Although an employee may have contributed to his or her injury at work, they can still file to be compensated. In most cases, the court will base its decision on the fact that the injury happened while an employee was at work.
For example, if an employee carries or lifts objects that are beyond the recommended amount and injures himself or herself in the process, the employer will still be held accountable. This is despite the fact that an employee largely contributed to his own injury.
However, if the employee was on drugs or taking alcohol and got injured in the process, it will be difficult for them to get compensation.
Bottom line
Worker’s compensation is generally designed to protect businesses from financial loss as well as protect employees from unexpected injuries. As a business, it is important to understand different aspects of the worker’s compensation before applying for it.
