In 2020, about 2.7 million non-fatal work injuries and illnesses were reported. These cases were accumulatively paid out more than $42.5 million in worker’s compensation claims. Businesses that don’t carry this insurance are forced to pay out-of-pocket costs for their employee’s medical bills or risk being sued.
But what is workers’ compensation insurance? What is and isn’t covered? Continue reading to learn what you need to know about workman’s comp.
What’s the Purpose of Workers’ Compensation Insurance?
This business owners guide will clear up the purpose of workers’ compensation insurance if you’re confused. Essentially, workers’ comp is insurance that provides coverage for any medical expenses that employees require from work-related injuries. Of course, there are exceptions to what is covered, as described later.
Generally, workers’ comp will also protect your company against related lawsuits. For example, if you carry this insurance, an employee cannot sue your company for injuries unless they result from severe, gross negligence on your behalf.
What Is Covered by Workers’ Compensation Insurance?
Worker’s compensation insurance covers:
- Immediate medical coverage: Including treatment at the hospital, ambulance rides, treatment by EMTs, or immediate treatment at a primary care physician
- Rehabilitation Services: Including physical therapy, occupational therapy, and (in some cases) mental health treatments stemming directly from the injury or accident
- Disability: Both permanent and temporary disability payments stemming directly from the workplace accident or injury
- Lost Wages: A percentage of money lost from not being able to work, based on an employee’s standard hourly rate and weekly hours worked
- Survivor Benefits: Benefits paid to a surviving spouse or child if a workplace accident results in death
What Is Not Covered by Workers’ Compensation Insurance?
Although worker’s compensation insurance covers most work-related injuries, there are situations where accidents aren’t covered. Generally, any injuries or accidents that happen because of the employee’s fault aren’t covered.
But what constitutes employee fault in a workers’ compensation claim? It’s actually much more straightforward than determining fault in other claims cases. A few examples of things that aren’t covered include:
- Gross negligence on behalf of the employee
- Injuries were obtained when an employee was drinking or doing drugs at work
- Injuries are obtained when an employee shows up to work drunk or high
- Injuries that occur while on the premises for wellness programs or recreational activities
- Illnesses happening after eating food an employee brought from home
- Injuries that happen during the commute to or from work
What Is Workers’ Compensation Insurance? Answered!
What is worker’s compensation insurance? Now you understand that the purpose of workman’s comp is to pay employee’s medical bills and protect your company from related lawsuits. Although this insurance doesn’t cover certain things, it generally provides comprehensive medical coverage.
If you still have questions about this insurance type, feel free to browse our other blogs. You’ll find articles on this and closely related topics to help you dive deeper into the matter.