Workers’ compensation insurance is also known workers compensation. It is an insurance that covers the medical expenses of the workers along with employee rehabilitation and death benefits. Every state has its own unique set of workers compensation. These regulations are made to ensure that the employees are provided with the cost of injuries that happen in the work premises and for the diseases that are caused because of your occupation.
An employee can take the advantage of workers compensation insurance only if the injury is related to their job duties or employment. The injuries that workers ’ compensation insurance cover include the injuries caused due to fire, by falling due to wet floor, lifting heavy equipment and so on. To avail the compensation, the employee should be acting as per the company regulations. Just for example, if an employee gets injured because he was playing basketball on a Sunday, the workers compensation insurance won’t cover the cost of treatment.
By law each and every state requires workers’ compensation insurance. It depends on the type of the organization that whether it needs to provide workers’ compensation insurance or not. By not providing the workers’ compensation insurance, you would be putting your organization under risks of getting fined by law and also for not taking workplace injuries seriously. This insurance provides a protection to your business too along with your employees. This is how it works; any employee who gets injured while working, cannot sue you in the court of law for his injuries.
Now you must be wondering how the cost of workers’ compensation insurance is determined.
Every business with similar nature is grouped into “classes”. By similar nature, we mean that the injuries which are expected to happen on the work place are of similar patterns and may cost the same. The rates are determined after considering the losses of the company in the past few years. This way the rates system tends to stay equitable. A system called “experience rating” has been introduced to benefit the class by allowing the rates to be based on the loss history of any business that belongs to that particular class.
The employer bears the entire cost of compensation. An employer is liable to bear this cost because this cost comes with the benefit of having more than one employee. The health insurance is shared by the employee and the employer. But the cost of workers’ compensation is not shared between them.
An example of workers’ compensation claim is as follows-
• An employee who is responsible for moving heavy cartons of raw material from the carrier to the storage room gets injured as he fell from the stair case. He ends up getting a fracture in his foot. So it is the responsibility of the employee under the workers’ compensation insurance to pay for the hospital expenses such as doctors fees, employees stay in the hospital, medicine etc. Apart from these expenses, the employee is entitled to get his wages for the days he is on rest.
Ella Rich is the one who started the Business Insurance Agency where they provide enormous products including Worker's Compensation Insurance that covers the medicinal costs of the laborers alongside worker recovery and demise benefits.