Worker’s Compensation policy is likely a minor policy in your overall property and casualty insurance portfolio, but the law requires that employers maintain a safe working environment as a measure against accidents. The Insurance Information Institute emphasizes this legal obligation and businesses are encouraged to invest in a workers’ compensation policy in case an employee suffers any work-related injury.
Your worker’s compensation policy is meant to compensate employees who are injured on the job and require professional medical care (including rehabilitation), and to cover lost wages. Failure to invest in workers’ compensation insurance can cause your business to suffer lawsuits stemming from workplace accidents.
Does My Organization Need a Worker’s Compensation Policy?
When seeking professional legal assistance, law firms such as Dolman Law Group encourage employers to invest in their workers’ health and take a more active role to ensure the success of the business. But to find out the extent to which a compensation plan matters, let’s look at four reasons why this policy matters today:
- It’s a legal requirement. Some states require employers to carry a workers’ compensation policy even if they only employ a single worker. You must carry this policy in compliance with the law.
- The policy protects one of your most valuable assets: your workers. If they suffer an injury while on duty, the policy will cover any medical bills and compensate them for lost wages as they recover. Having a compensation plan ensures that your workers return to work quicker.
- Workers’ compensation policies are flexible. Do your employees travel across state lines? Check with your insurance provider to find out whether the policy protects employees when they travel.
- Prevention can help keep premiums down. A solid safety program not only keeps your workers safe, but it also minimizes costs in the long run. The more effort you put into preventing accidents the lower your monthly premiums will be.
Coverage May Vary by State
The nature of compensation policies is that they differ slightly from one state to another – and as such, employers should make certain that policies are endorsed by the state in which their business operates. Furthermore, job classifications tend to determine the scope of each policy and failing to classify employees correctly can have a negative effect on your policy.
Workers’ compensation allows payments to be made towards injured workers without regard to who was at fault, and the best part is that injured employees are compensated for lost wages – and when necessary, rehabilitation costs. Some workplaces are riskier than others however as an employer you are expected to minimize risk and educate all workers on safety measures and the steps to take in case of an accident.
The amount of money compensated for lost income benefits is determined by existing state laws and how the system is administered. For instance, each state has its own regulations for solving common disputes and issues such as whether an employer can select which doctor treats the injuries.
Workers’ compensation insurance is sold as a separate policy and shouldn’t be confused with home-business and business-owner policies (BOPs) which are typically sold as package policies. These types of policies don’t include coverage for workers’ injuries. Learn how your business can benefit from having a workers’ compensation plan today.