Workers Compensation Information
 |
Why You Need Workers' Compensation
Insurance
As soon as you hire your first employee, you need the protection of
workers' compensation insurance. Not only do many state laws require
it, but also the financial security of your business depends on it. |
What Workers' Compensation Insurance
Is
In general, workers' compensation represents a compromise between
employers and employees regarding employment-related injuries or
illnesses. In short, employees relinquish their right to sue
employers if they suffer some job-related injury or illness. But in
return, employers agree to provide state-mandated benefits if
employees suffer some job-related injury or illness. And to ensure
employees have the money to pay these mandated benefits, most states
require that employers demonstrate that they have the financial
ability to pay any claims that may arise. Typically this financial
ability is demonstrated through the purchase of Workers'
Compensation insurance. Laws regarding workers' compensation
insurance vary by state, so check with your independent insurance
agent or broker to find out exactly what you need and how it's
purchased. |
How Workers' Compensation Insurance
Works
Most workers' compensation insurance policies actually provide two
types of coverages: |
| Workers' Compensation Coverage.
This type of insurance provides benefits for injured workers as
required by state law regardless of who is at fault for the injury
or illness. In other words, whatever benefits your state requires,
your Workers' Compensation policy would provide. |
| Employers' Liability Coverage.
This additional coverage protects employers in case they are ever
sued for damages arising from employment-related accidents or
diseases. However, to collect benefits provided by employer's
liability coverage, both the employee as well as anyone else not
covered by workers' compensation laws (i.e., spouses and dependents)
would have to prove that the employer was actually legally
responsible for the employee's injury or disease. |
