Workers Compensation Insurance Risk

Trying to operate your business completely alone is a recipe for disaster, but hiring employees to work for you creates additional responsibilities and potential risks. When you have someone on the payroll of your company, they have complete expectations that you will take care of them or their family if something goes wrong. Workers compensation was designed specifically for this purpose, because when large accidents result in severe injuries, your company is unlikely to be able to handle all of the associated expenses that get generated. Even simple accidents can result in enormous bills because of the emergency care that’s needed, specialized testing or technicians, surgeries, medications and more.

Workers Compensation Insurance

insurance plans for workers comp coverage

Employees fully expect to be taken care of if they’re ever involved in a work related accident. They trust you as the employer, to take full financial responsibility for their care when applicable. Workers compensation is insurance that helps your company meet those expectations while often complying with federal laws as well. This insurance is often required coverage in most states, and it provides multiple benefits to workers and the companies who employ them.

Medical Care

The best known benefit to employees in a workers compensation insurance policy guarantees that medical care can be obtained and paid for if the worker suffers a work related injury. Medical care coverage applies when the employee is made ill or contracts a disease from his job or from something associated with his job as well. This portion of workers compensation insurance pays for the employee to be seen by a physician or specialist. It pays for emergency room treatments or hospital stays when warranted. It pays for related reasonable costs such as medications, medical devices, surgeries, lab tests and rehabilitative services.

First Aid Treatment

Even when minor injuries or illnesses arise from an employee’s job duties, first aid treatment is required. In some states, there are laws that require physicians to file specific forms for each case of treatment, even when simple first aid was all that was needed. In California for example, this form is called a "Doctor's First Report of Injury" (DFR). So if an employee gets cut while working and the company’s doctor must apply antibiotic ointment and a band aid, that doctor must fill out and file paperwork. These requirements incur costs which are paid for by the workers compensation insurance.

Temporary Disability

If one of your employees is involved in a work related accident that makes them unable to come back to work for several days, they are classified as temporarily disabled and are eligible for partial payment of their wages while they’re recovering. The temporary disability status must be confirmed by the appropriate doctor and be declared that the status was caused from an injury or illness on the job. Temporary disability payments normally consist of two-thirds the employee’s standard salary and are paid every other week. These benefits continue until the worker is able to return to normal job duties, or he is officially declared permanently disabled by his attending physician, or to the maximum term limit allowed by the policy. Maximum term limits are normally two years but may extend to four years for specific types of injuries.

Permanent Disability

When physical injuries or illnesses caused by or related to an employee’s work duties cause him to be unable to return to normal operations, his physician may declare him to be permanently disabled. If that happens, workers compensation insurance provides permanent disability benefits. Benefit payments are calculated by a number of factors, including: the extent of the employee’s injuries and impairment, how much potential there is for earning income in the future, how old he is, when the injury happened, and what type of work he was doing at the time of the impairment. When permanent disability benefits are issued, the workers compensation policy calculates the maximum benefit amount the worker will receive, and sends payments every other week until that maximum total has been reached.

Death Benefits

If an on the job accident results in a worker fatality, workers compensation pays for the associated costs of burial. If the decedent has living dependents, they may qualify for payments to help financially support them for a specified amount of time.

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