Workers Compensation
Workers compensation laws were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.
Most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not health insurance. Workers Compensation is designed specifically for injuries sustained on the job.
Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.
Why do I need workers compensation insurance?
Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.
To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they’re hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.
Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.
Workers compensation insurance must be bought as a separate policy. Although in-home business and business owner’s policies (BOPs) are sold as package policies, they don’t include coverage for workers’ injuries.
In many states if you do not have your own Workers’ Compensation insurance, your client may be required to cover you under their Workers’ Compensation policy. Your client does not want to pay additional premium to their insurance company and does not want any claims for injuries filed against their policy. As result they require that you provide proof of coverage that they can show to their insurance company. Even though you may not be required to carry this coverage according to your state’s law, you client may still require that you maintain this coverag
