What is Worker’s Compensation Insurance (Workers' Comp)?
Worker's Compensation Insurance (Workers' Comp) is a type of insurance that provides wage replacement and medical benefits to employees who suffer injuries or illnesses arising out of and in the course of their employment. It also protects employers by limiting their liability in case of employee injuries, as workers' comp is usually the exclusive remedy for work-related injuries, meaning employees can't sue employers for negligence.
Key Features of Workers' Compensation Insurance:
Medical Benefits:
Covers the cost of medical treatment for an employee’s work-related injury or illness, including doctor visits, hospitalization, and rehabilitation.Wage Replacement Benefits:
Provides partial wage replacement (typically two-thirds of the employee's regular wages) if the employee is unable to work due to the injury or illness.Disability Benefits:
If the employee is permanently or temporarily disabled due to the injury, they may receive compensation to help with the loss of earning capacity.Death Benefits:
If the employee dies as a result of a work-related accident or illness, workers' comp provides death benefits to the employee's dependents (spouse, children).Vocational Rehabilitation:
Helps employees who are injured or ill and cannot return to their previous work retrain for a different job or role within the company.
Why Do You Need Workers' Comp?
Legal Requirement: In most states, it's mandatory.
Protects Employees: Ensures employees are compensated for injuries and illnesses that happen on the job.
Protects Employers: Limits liability and protects against lawsuits related to workplace injuries.
Helps Prevent Lawsuits: By providing benefits to injured workers, it generally prevents them from suing the employer for negligence.