What Does Workers Compensation Insurance Cover?
Workers compensation insurance covers illnesses and injuries employees suffer while on the job. This insurance program, which is governed differently in each state, provides financial benefits while individuals recover from their medical conditions. Almost every employer in the United States is required to carry workers compensation insurance.
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Benefits
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Workers compensation insurance plans are no-fault policies, which means that neither party is responsible for the incidents that cause the injuries. Employees who are eligible to receive insurance benefits will receive payments that replace about two-thirds of their salaries, according to NOLO. They will also receive money to cover their medical and rehabilitation costs as well. In the unfortunate event that worker dies on the job, death benefits are paid out to his surviving spouse and dependents.
Considerations
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When workers are injured on the job, companies generally send them to physicians' offices to be medically evaluated. Employers contract the physicians, so their focus is to save companies money by making sure that the employee's injuries were in fact caused while working. Individuals can ask to seek medical attention from their own doctors but it has to be in writing prior to any injuries or illnesses.
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Purchasing Workers Compensation Insurance
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Workers compensation insurance premiums are determined by information the applicants submit. Some of the factors that determine insurance pricing include the company's payroll, industry, claims history and experience ratings. Companies in high-risk industries, such as construction, pay more in premiums than accounting firms, for example. Although states make the laws governing workers compensation insurance, they do not sell the coverage itself. Companies purchase workers compensation insurance from private insurance companies.
Exclusions
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Workers compensation insurance doesn't pay benefits to workers who were injured while committing illegal acts or were found to be intoxicated or using illegal drugs when the incidents occurred. Workers are also not paid if the injuries were self-inflicted. Companies that are excluded from purchasing workers compensation insurance are those that are small (less than four employees) or that have the financial capabilities to self-insure.
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References
Resources
- Photo Credit worker image by Robert Kelly from Fotolia.com
