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Workers Compensation Insurance - The Basics from The Reis Group

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Workers Compensation Insurance - The Basics

by Allison Teetsel on Mar 4, 2013

How much do you know about workers compensation insurance? Businesses are required to provide workers comp coverage in just about every state. Failure to do so can result in serious consequences, including fines, civil and criminal penalties, and cease-and-desist orders. There's no doubt that workers compensation is important, but why? Let's take a look at the basics:

What is Workers Comp?

Workers Compensation Insurance is a type of no-fault coverage that provides workers with compensation for lost wages and medical expenses due to certain illnesses and injuries that are related to employment. Workers Comp also protects employers from lawsuits resulting from workplace accidents.

What is Covered?

Workers Compensation Insurance provides payments to ill or injured workers to cover the following:

  • Lost wages

  • Medical expenses

  • Vocational rehabilitation

  • Death expenses

Illness and injury covered by Workers Comp fall within two categories:

  • Those that result from a specific work-related accident (such as injuries sustained in a fall)

  • Those that occur over a period of time and are directly related to employment (such as a strain caused by repetitive motion)

Who Needs Workers Compensation Insurance?

You may think that workers comp is only necessary for workers in high-risk jobs, such as construction workers. The truth is that accidents can happen to anyone, at any time, regardless of how safe their job seems. In fact, the most dangerous industries for nonfatal occupational illnesses and injuries (based on nonfatal injuries per 100 full-time employees) include:

  • Natural resources and mining

  • Construction

  • Manufacturing

  • Retail trade

  • Transportation and warehousing

  • Utilities

  • Education and health services

  • Leisure and hospitality

  • Air transportation

  • Building material and garden equipment and supplies dealers

  • Couriers and messengers

  • Beverage and tobacco product manufacturers

The nature of an accident is that it's unexpected. Don't be caught off guard—ensure that you (and your employees) have adequate coverage.

What are the Benefits of Workers Compensation?

In addition to the financial protection that it affords you and your employees, workers compensation insurance can also provide some secondary benefits, such as:

  • Increased employee morale – By providing workers' compensation insurance, you are sending the message that you care about your employees and their contributions to your company.

  • Increased productivity – Without workers' compensation coverage, employees may put off treating an illness or injury, negatively impacting their overall job performance.

How Much Does it Cost?

Your workers compensation insurance premium may vary depending on a number of elements, including the state where you do business, the number of people you employ, and the nature of your industry. Your local insurance agent can help you to determine the specific terms and requirements for your state.

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