All About Workers’ Compensation Coverage

Workers’ compensation insurance, also known as workman’s comp, provides benefits to employees who get injured or sick from a work-related cause. It also includes disability benefits, missed wage replacement and death benefits.

Workers’ comp also reduces your liability for work-related injuries and illnesses. Without coverage, your employees can sue you for a work-related injury or illness to help pay for their medical costs or lost wages.

Most states require businesses with employees to carry workers’ compensation insurance. However, each state has different rules, so the state or states where you do business will determine your workers’ comp insurance requirements. It’s your responsibility to buy coverage through a licensed insurance company, like Densmore Insurance Strategies, Inc.

What Does Workers’ Comp Cover?

If your employee suffers a work-related injury or illness, workers’ comp benefits can help cover their:

• Medical expenses
• Lost wages
• Ongoing care costs
• Funeral expenses

These workers’ comp benefits aren’t available if your employee gets hurt or sick outside of work. Benefits may also not be available for intoxicated employees that get into an accident, or employees that intentionally hurt themselves.

Medical Expenses

Workers’ comp insurance provides coverage to help your employee pay for medical expenses related to a work-related injury or illness. This can include emergency room visits, necessary surgeries and prescriptions. For example, if one of your electricians cuts their hand at a customer’s home, workers’ compensation insurance can help cover their hospital visit.

Missed Wages 

Workers’ comp helps replace some of your employee’s lost income if they need time off to recover from a work-related injury or illness. So, if your restaurant chef spills a pot of boiling water on her arm and can’t work for two weeks, workers’ compensation coverage can help replace some of her lost wages.

Ongoing Care

Some work-related injuries or illnesses can be so severe that they need more than one treatment. For example, if your warehouse employee hurts their back while lifting heavy boxes, workers’ comp insurance can help cover their ongoing care costs, like physical therapy.

Funeral Costs

In the unfortunate event your employee loses their life from a work-related accident, workers’ compensation coverage can help cover their funeral costs and provide death benefits to your employee’s beneficiaries.

Illness

Sometimes, working conditions can expose your employees to harmful chemicals or allergens that lead to illness. If your employee gets sick due to a work-related incident or condition, workers’ comp insurance can help cover their costs for necessary treatment and ongoing care.

Repetitive Injury

Not all work-related injuries are the result of a single traumatic incident. Repetitive injuries, like carpal tunnel syndrome, can take months or years to develop. If your receptionist develops carpal tunnel syndrome after years of typing with poor ergonomics, workers’ comp can help cover treatment costs and ongoing care bills.

Disability

Some work injuries may be severe enough to temporarily or permanently disable your employee. Workers’ compensation coverage can give your disabled employees benefits to help pay their medical bills and replace some of their lost wages.

Let’s say your foreman loses the use of one of his legs and is partially disabled because of a work-related accident. He’s unable to return to work and needs continued medical and financial support. Workers’ comp can help cover his treatment costs and supplement some of his missed wages through disability benefits.

Who Is Covered by Workers’ Comp Coverage?

Several factors, like specific roles and the size of your business, determine which employees need workers’ compensation coverage. Requirements vary from state to state, but most require workers’ compensation coverage for full-time employees. Some states have laws about workers’ comp for contractors, temps and interns. It’s important you know what your state requires for workers’ comp coverage.

Some states don’t require workers’ compensation coverage for:

• Farmhands
• Insurance agents
• Family members under a certain age
• Casual workers
• Business owners and partners
• Real estate agents

Federal government employees are also not covered by state-regulated workers’ compensation insurance. Instead, they’re covered by federal workers’ comp. These exceptions do not apply to every state, so you need to understand your state’s workers’ compensation laws.