Workers Compensation laws were created to ensure that employees who are inured on the job are provided with fixed monetary awards.  It provides benefits to employees for work-related injuries or illnesses including medical care, wages from lost work, and more.  Workers Compensation Insurance provides a deceased workers’ family with a financial benefit and, can also help cover legal fees in the event that a workers’ family decides to sue the company.

This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers.

Why Workers Compensation Insurance

In almost every state, businesses are required to buy Workers Compensation Insurance which will protect employers from lawsuits resulting from workplace accidents, and provide medical care compensation to employees for lost income if they were hurt in workplace accidents.

Employers have a legal responsibility to make the workplace safe for their employees, however; accidents happen even when every reasonable safety measure has been taken.  As such, workers compensation insurance was designed to cover workers that have been injured on the job or suffered a work-related illness.

Workers Compensation provides payments to injured workers for any time lost from work and/or for medical and rehabilitation services without regard to who was at fault in the accident. Workers Compensation Insurance also provides death benefits to surviving spouses and dependents

Workers Compensation Insurance is not health insurance.  It must be bought as a separate Policy. Although in-home business and business owners policies (BOP’s) are sold as package policies, they do not include coverage for injuries to employees.

Is it mandatory to provide Workers Compensation Insurance?

Yes. Employers are required to obtain and keep in effect, workers’ compensation coverage for all employees.  The sole proprietor, partners, or the president, secretary and treasurer of a corporation are personally liable for a business’ failure to secure workers’ compensation insurance.

An employer is liable for a penalty of $2,000 per 10-day of noncompliance, plus the actual award (including both compensation and medical costs), and any other penalties assessed for noncompliance.  In cases involving severely injured employees, the medical costs alone could be in the hundreds of thousands of dollars per injury.