Workers' compensation insurance is a legal requirement. The insurance policy provides coverage when workers suffer injuries and illness at their place of work. So how does worker's comp insurance work, and what does it include? 

What Is Workers' Compensation Insurance?

Workers' compensation insurance provides protection for work-related injuries and illness. The policy provides medical care, disability compensation, and death benefits for workers injured or killed during work. In almost all the states, any business employing workers must maintain workers' comp insurance per labor laws. Notably, the insurance company agrees to pay all the benefits and compensation claims for workers' comp regardless of who is at fault. The insurance premiums depend on the employers' payroll and the nature of an employee's work.

Typically, the insurer pays all benefits per the workers' compensation law since the policy has no limits. Nevertheless, the employer may assume responsibility for any payments by the insurer exceeding the workers' compensation benefits. Such costs may result from willful misconduct, illegal employments, or failure to comply with workplace health and safety regulations. In such cases, the employer reimburses the insurer for the payments exceeding the workers' compensation benefits. 

What does Workers' Compensation Insurance Cover?

1. Medical Expenses 

Workers comp insurance primarily meets the medical expenses for injury and illness treatment. Usually, workers may sustain injuries due to workplace accidents and incidences. Also, employees may develop a physical or mental illness due to exposure to various work tasks. In such cases, the workers' compensation policy caters for the cost of immediate medical care, including ambulance and emergency room services. Also, the insurance cover can cater to continuing medical care, including rehabilitation services. 

2. Missed Wages 

Severe injuries and illness can lead to temporary disability. Thus, the injuries and ailment may prevent the workers from returning to work in the short to medium term. Usually, the workers' compensation pays for the lost wages during the recovery period. Thus, an employee can enjoy a decent income, and the employer does not have to pay for the wages. Besides, the insurance policy provides compensation for long-term disability. 

3. Fatal Injuries 

The workers' compensation insurance also provides coverage for fatal injuries. For instance, an electrician may suffer fatal electrocution, or a company driver may get into a deadly accident. In such cases, the hiring company can provide death benefits through workers' comp insurance. The deceased workers' immediate beneficiaries receive payment for funeral costs and death benefits. 

4. Lawsuits Related to Work Injuries 

The workers' compensation caters for legal costs associated with liability lawsuits. In some instances, the worker may sue the employer for negligence. Therefore, the insurance company would cater to the attorney's fees and court costs. Besides, the workers' compensation also pays for settlements and judgments. 

However, workers' compensation insurance does not pay for: 

  • Injuries from intoxication or company policy violation 
  • Injury claims after an employee lay off
  • OSHA fines and penalties 
  • Wages for replacement employees 

Contact workers' compensation insurance providers for more insight.