Workers’ comp insurance is crucial to protecting businesses and their employers because it provides benefits to employees who suffer job-related injuries or illnesses, ensuring they receive medical care, compensation for lost wages, and other necessary support.
On the other hand, workmans comp coverage shields businesses from financial liability in work-related incidents.
This guide explores the various aspects of workmans comp coverage, including coverage, benefits, exclusions, and the claim process.
Table of Contents
Understanding Workers’ Comp Coverage
Workers’ comp insurance offers two types of coverage: Part A and Part B.
Part A refers to the policy mandated by state laws, which provides protection to employees and includes benefits such as:
- Medical costs
- Lost wages
- Disability benefits
- Ongoing care
- Work-related injury legal fees
Part B of workmans comp coverage offers employer’s liability coverage, and it provides the same kind of benefits as Part A. The difference is the former also protects employers against liability to third parties resulting from an employee’s injury caused by the employer’s negligence.
So, what’s not covered by workmans comp coverage?
While workers’ compensation insurance provides extensive coverage, there are certain exceptions you should be aware of just to be on the safe side. These exclusions include:
- Injuries sustained by volunteers
- OSHA fines
- Wages for replacement workers
- Injuries claimed after termination or layoff
- Injuries to independent contractors (varies depending on the jurisdiction)
- Self-inflicted injuries
- Injuries resulting from non-mandatory social or athletic events
- Injuries caused by activities outside of work hours or the scope of business.
- Injuries resulting from the use of alcohol or drugs or violations of known employer safety rules
You must keep in mind that workers may be eligible for workmans comp coverage even if the injury occurs outside the workplace but under certain circumstances, such as transportation provided by the employer, travel to and from work, and company-sponsored events that are mandatory.
Understanding the Workers’ Comp Claim Process
The workers’ compensation claim process involves several steps that both employees and employers must follow. It is crucial to know what’s involved to ensure smooth and efficient claims processing.
For starters, the injured employee must seek prompt medical care and notify their employer in writing about the injury. They must then file a claim with the Division of Workers’ Compensation within the specified time frame, after which the employer will proceed to file a general admission or denial within a set period.
The claim may proceed to a hearing if liability is denied, and the employee can appeal the decision.
How much does workman’s comp coverage cost?
How much workman’s comp coverage costs depends on several factors, such as:
- The industry in which the business operates
- The number of employees
- The safety record of the business
- Nature of employee job duties
- The size of the payroll
Note that different states have varying regulations regarding workman coverage, so business owners must seek to understand their state’s specific regulations and work with experienced insurance providers to find the right level of coverage.
To Sum It Up
Workers’ comp insurance shields employers from potential financial liability, protecting their business and reputation.
So, when selecting workers’ compensation insurance, businesses must consider various factors beyond basic coverage. Familiarizing themselves with state regulations, understanding the claims process, and working with reputable insurance companies are all essential steps to ensure compliance with state regulations and obtain the right level of coverage.