What is it?
Workers’ compensation is a type of insurance employers need to carry for their employees’ job-related illnesses and injuries.
It also protects you (the employer) if the employee decides to sue you for workplace conditions that might have caused the illness or injury.
Workers’ comp can apply to you, as well, if you choose to be included in the coverage. If you are included, these questions also apply to you.
What does it actually cover?
Protection highlights include:
- Hurt employees: Workers’ comp covers medical costs and lost wages of employees hurt on the job. The policy also covers funeral expenses, should an employee die.
- Sick employees: It covers lost wages and medical costs of employees who get sick on the job, as well as funeral expenses in case of death.
- Employee lawsuits: If an employee sues you for negligence regarding an on-the-job injury or illness, the employer’s liability portion of the policy will help you.
What happens if my employee is hurt on the job?
If your employee is injured, they should report it to their supervisor immediately. They should request to see a doctor and complete a workers’ compensation claim form (which varies by state). As the employer, you are not obligated to provide benefits until the injury is reported.
What benefits are my employees entitled to?
The employee is entitled to four basic benefits:
- Medical treatment: The bills for all treatment required to heal the effects of the injury.
- Disability payments: If the employee is unable to work while recovering, a WC policy provides partial compensation for lost wages.
- Permanent disability settlement: Should the injury cause permanent restrictions, compensation will be made based on the severity of disability.
- Vocational rehabilitation: If your company has no position that can cater to the employee’s disability, workers’ comp will cover the cost of training the employee for a new job.
Who pays for the benefits?
The provider of your insurance policy will send the workers’ compensation benefits directly to your employee.
Can my employee see his/her own doctor?
Seeing a personal physician depends on your state’s rules and regulations. You will need to speak to your insurance provider to see if this is possible.
What is a waiver of subrogation?
This can be kind of tricky to explain, so let’s use an example.
You, the self-employed person, are contracting work with a client. You also have subcontractors working for you and helping out on the project.
If a waiver of subrogation has been signed and the client somehow causes an injury to your employee, you cannot come back and collect workers’ compensation from the client’s insurance company, even though they played a part in the occurrence.
What payment plan is best for my company?
If your payroll fluctuates monthly or seasonally, you’ll benefit more from pay as you go. You will be able to keep more cash throughout the policy period, rather than paying a large sum upfront and waiting to get it back at the end of the policy period.
If your payroll is constant, you could choose a fixed payment plan, which is a good bet.
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Learn more about other kinds of business insurance.