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What You Need to Know about Workers’ Compensation: An Overview

Employees in all occupations are at risk of getting injured or falling sick at the workplace. For instance, while overexertion, falls, and cuts are rampant in blue-collar jobs, white-collar workers mostly suffer repetitive stress injuries such as carpal tunnel syndrome. In the event of a work-related injury or illness, the employer may be held responsible, and therefore, suffer the resulting financial and legal implications. That’s where workers’ compensation insurance coverage comes in handy. Here’s everything you need to know about this type of coverage.

What Is Workers’ Compensation Insurance?

This type of insurance is designed to cover the costs resulting from a workplace injury, illness, or death, including lost wages, medical expenses, and funeral expenses. It also shields employers from lawsuits related to workplace accidents. While almost all states across the country require employers to enroll in the workers’ compensation system, each state has specific laws surrounding workers’ comp, with some states mandating it based on the number of employees. For example, the state of Florida requires employers to have workers’ comp provided they have four or more employees, unlike states such as Connecticut and Ohio, which require coverage for even one employee.

Why Do You Need Coverage for Your Business?

If your business is based in any state other than Texas, you need workers’ compensation insurance for legal compliance. This will protect you from penalties and financial losses associated with non-compliance. In general, you need workers’ comp too:

  • Protect employees – The right workers’ comp ensures that your injured and sick employees receive proper medical care without jeopardizing their finances.
  • Keep productivity high – Studies show that compensation and benefits can motivate employees to work harder and become more productive. By purchasing workers’ comp, you will likely increase your employees’ workplace productivity.
  • Keep lawsuits at bay – Employees typically lose their rights to sue an employer for work-related injuries, provided they accept workers’ compensation insurance. This means that by carrying workers’ comp, you will have mitigated the risk of personal injury lawsuits in your business.
  • Protect business finances – Workers’ compensation insurance saves money that would have otherwise been lost to medical expenses, reduced productivity, and sickness or injury absenteeism.

Who Needs Coverage?

Typically, an employer with at least one full-time or part-time worker should have workers’ comp, even if the employment is contractual. However, this varies by state, and hence, it is prudent to determine the workers’ comp requirements in your state before making an insurance decision. Freelancers and independent contractors are exempted from this coverage.

When Should You Buy a Policy or File a Claim?

The best time to get workers’ compensation insurance is immediately after hiring your first employee, even if it is not a legal obligation. This is important because workers’ comp can protect your business finances in case an employee gets injured at work. For any subsequent hires, make sure to increase your coverage amount to avoid underinsurance. The insurance company will only allow you to file a claim provided there has been a work-related injury or illness involving your employees during the policy period. Additionally, the insurer will require you to file the claim within a stipulated timeframe, usually three years. However, be sure to report the injury as soon as it happens.

Where Can You Get Workers’ Comp?

You can purchase workers’ compensation from any of the insurance companies registered by the National Association of Insurance Commissioners (NAIC). Another option is to buy this coverage from federal government workers’ compensation programs if you are a government employee.

How to Get the Right Workers’ Compensation Coverage

To learn more about workers’ compensation coverage, contact our experts at Atlas Insurance in Sarasota, FL. We can help customize your workers’ compensation insurance coverage based on your unique needs.

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