How Does Workers Compensation Insurance Work?

Posted on Sep 01, 2017

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Workers compensation insurance (WCI) is something that employers are required by law, in most cases, to provide for employees. Even the most diligent employers who seek to minimize workplace hazards and accidents can have an unexpected tragedy. When such things happen, Workers Compensation Insurance, also referred to as workman’s compensation insurance seeks to minimize the impact of these tragedies on employees and their families.

How Does WCI Accomplish This?

While there are some variations in the rules and requirements of WCI coverage from one state to the next, there are some essential elements that most WCI policies bring to the table to assist employees who are victims of workplace accidents, injuries, illnesses, or deaths. Among these items are the following:

Coverage for Medical Care Required for Work-related Injuries

Obviously, many illnesses and injuries received on the job will result in medical expenses. Especially those that cause your employees to miss work for several weeks or longer. WCI will cover medical expenses for injuries received on the job.

Wage Replacement Coverage

Depending on specific state laws, wage replacement may be available for long-term disability, short-term disability, or a combination of the two. This doesn’t include complete wage replacement coverage but does provide a portion of employees’ wages while they are out of work due to their injuries and recoveries.

Vocational Rehabilitation Services

If an employee’s injuries require rehabilitation, worker’s compensation insurance will cover the costs of the rehabilitation therapies and services. From physical and occupational therapies to other treatments that can help your employee regain their ability to perform their role at your organization, workers compensation will cover these expenses.

Survivor Benefits

In the unfortunate event that an employee dies as a result of illnesses contracted through the workplace or because of injuries received on the job, workers compensation coverage will pay survivor benefits to the family of your employee. While no amount of money can replace a life lost, this can help ease the financial burden on the family of employees as they work through this difficult time.

WCI Exclusions

There are times when workers compensation doesn’t cover injuries. Each state will have specific requirements, however, most WCI programs exclude injuries that are related to drug or alcohol abuse by an employee, injuries that are self-inflicted, or injuries that are the result of intentional acts.

Can Employees Sue You if You Provide Workman’s Compensation Insurance?

One of the big perks to employers related to WCI is that by accepting employer-provided coverage, employees agree not to sue you if an accident or injury occurs. Part of the reason employer-provided WCI exists today is that workers injured on the job in the early 1900s could not afford to sue their employers to prove their injuries were the fault of employers. Additionally, they were left to pay for medical treatment, deal with lost wages, and often seek new employment despite sometimes permanent disabilities with no assistance from their employers at all.

The trade-off seems fair by modern standards. Employees now receive excellent medical care, coverage for their lost wages, and rehabilitation services as needed. However, that doesn’t mean you can create unsafe work environments for your employees. The one exception is that your employees can sue if you are reckless or take intentional action that results in employee injuries.

Workers comp insurance works to protect more than your employees. When proper care is taken by your organization to create a safer work environment, it can protect your business from lawsuits and help your team members return to work faster and in better health after injuries occur.

To learn more about workers compensation or to receive a quote, call us here at Otterstedt Insurance Agency today at 201-227-1800.

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