What Does Worker's Comp Insurance Cover?
Workplace safety should be a top priority for employers as well as federal and state agencies responsible for the well-being of millions of workers. Since workplace accidents inevitably do occur, worker's compensation insurance was created at the state level to cover work-related injuries and help employees financially until they can return to work.
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Employers
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Most states require employers to purchase worker's comp insurance for their employees, but employers benefit from the coverage as well. They don't have to establish their own form of compensation for injured workers, and worker's comp insurance also covers employers' legal fees and settlements in the event of lawsuits brought by injured employees. Because worker's comp insurance is no-fault insurance, it provides coverage regardless of who is at fault.
Employees
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An injured worker may receive benefits for medical treatment, ongoing therapy and lost wages. Worker's comp also covers injuries that result in death by providing a death benefit to the worker's family.
Worker's comp also gives workers the right to work in a part-time or reduced capacity during the final stages of recovery.
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Benefits
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Worker's compensation insurance provides several types of benefits. State laws list the minimum coverage that employers must purchase, but employers who purchase additional insurance, or workers who buy their own supplemental insurance, stand to receive greater benefits. Worker's comp covers the wages an injured worker would have earned during her absence. For workers who can return to their jobs but aren't able to earn as much as they could prior to the injury, some states, such as New York, require insurance to cover two-thirds of the wage reduction. The insurance provider also issues direct payments to doctors, pharmacies and therapists for the full cost of treatment or medication.
Limitations
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Worker's comp insurance only applies to injuries that employees sustain at the workplace or develop over time as a result of activities directly related to work. Employees who make worker's comp claims for injuries they receive at home or elsewhere are in violation of state laws and can be charged with insurance fraud. Worker's comp laws also deny coverage to workers whose on-the-job injuries are intentional or the result of drug or alcohol use. Some forms of worker's comp insurance only cover select doctors or medical providers, which means injured workers need to select from an approved list of doctors or risk being responsible for their own cost of treatment.
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