Updated: Dec 3, 2021
Do I Need Workers’ Compensation Insurance?
Workers’ compensation insurance protects a business from lawsuits that could occur because of a workplace accident. This policy will also provide medical care and compensation for lost wages as needed when an employee receives an injury while working.
This insurance covers a worker while they are on the job, no matter where that location might be. It even covers automobile accidents that occur while performing required duties or work-related illnesses.
Workers’ compensation does not care who was at fault for an accident. It will also provide injured employees with access to medical services and rehabilitation care and, in severe situations, may even provide a death benefit to surviving dependents or a spouse.
What Does Workers’ Compensation Cover?
Workers’ compensation plans can vary based on local laws and requirements, but the general policy will provide medical care without charge to an injured worker. Transportation costs to an appointment lost wages, and other expenses are typically part of a claim as well.
What a workers’ compensation policy does not cover are punitive damages against a business for negligence, reimbursement for pain and suffering, and coverage for expenses that fall outside of the need for care.
This structure works to eliminate the need for litigation should an injury occur in the workplace. By giving up the potential award for pain and suffering, employees no longer need to prove the legal fault of their employer.
Even if workers’ compensation is not compulsory, it is a policy that any business can purchase voluntarily. If you have at least one employee working for you, then you likely need this insurance.