A lot of pieces have to come together in order to run a business, especially if you want to keep running that business for many years to come. Workers’ compensation is one thing that your business can’t overlook. Without it, an insured employee who gets injured on the job could destroy everything you have worked hard to create.
But, what is workers’ compensation? Here’s everything you need to know to make sure your employees and your business are protected.
Understanding Workers’ Compensation
Workers’ compensation, which is also sometimes referred to as workers’ comp, is a type of insurance policy that protects employees by providing them with wage replacement and medical benefits, should they get injured or become ill on the job. It also protects employers, as policies are designed to greatly reduce or eliminate the possibility of being sued by an employee for negligence.
Employers pay for this insurance. Employees are not required to contribute to the cost of compensation in any way. No one party is determined to be at fault, which means the amount the claimant receives cannot be decreased depending on their carelessness, or increased due to the carelessness of the employer.
Exceptions do exist, though. For example, an intoxicated employee, or an employee who purposefully tried to injure themselves or someone else would warrant a dispute by the employer. If the judge sides with the employer, workers’ comp does not have to be awarded.
The employee may be entitled to a benefit that helps make up the difference if they are unable to earn the same wages they did before the accident, and they have the right to return to work with a lighter load or different duties.
Types of Workers’ Compensation
There are many different details that can go into a workers’ compensation policy, and those details can vary depending on the needs of the business. A few examples include:
- Medical treatments that can include doctor’s appointments, medication, therapy, and more
- Disability, which can include temporary or permanent disability benefits
- Death and funeral services that provide benefits to family and beneficiaries
- Lost income that replaces a portion of their wages
Policy Requirements in States Where Employees Work
Every state has requirements regarding workers’ comp policies. It is important to make sure that you’re adhering to the policy requirements where you live.
For example, in California, all employers and work situations must carry coverage, including corporate officers, and even if there is only one employee. Other states aren’t quite so strict. In Iowa, sole proprietors and LLC members are not required to be covered. In addition, some domestic workers and agricultural exchange laborers don’t have to be covered.
It’s important to know the rules where you live, but it’s also important to know the rules in states where you operate. If members of your crew regularly cross state lines, you will have to make sure your policy adheres to the rules of every state you serve.
Answering the question, “What is workers’ compensation” is a lot more difficult than it seems on the surface, especially if you’re running a new business and it’s not something you have dealt with before. If you have questions about the insurance requirements where you live or you’re wondering how to customize a policy to fit your needs, it’s a good idea to call an insurance services company, like DJM. You’ll learn a lot about workers’ comp from an expert, and you’ll walk away knowing you have a policy that will protect you and your employees in the event of an accident or an illness.