Workers' compensation is a type of insurance for businesses that offers protection and peace of mind to both employees and employers. Policies help assist workers who suffer job-related injuries or illnesses by providing them with financial compensation and medical care while safeguarding employers from litigation. 

Let's look closer at how workers' comp works and the myriad benefits it offers employers and employees.

What is workers' compensation?

Workers' compensation is a type of insurance required in many states that provides employees with financial and medical benefits if they are injured or become ill due to their job. It serves as a safety net, offering wage replacement, medical treatment, rehabilitation services, and, in some cases, benefits to dependents if a worker is fatally injured. 

The insurance also benefits employers by ensuring legal immunity against most injury-related lawsuits, predicting insurance costs, and reducing the risk of costly legal battles. 

Benefits of workers' compensation: What does workers' comp cover?

Medical coverage: Covers all medical expenses related to the work injury or illness, including hospital visits, medications, and rehabilitation.

Disability benefits and wage replacement: Compensation for a portion of lost wages to employees who are temporarily unable to work or permanently disabled due to a work-related injury or illness.

Death benefits: In the unfortunate event of a worker's death due to a work-related injury or illness, workers' compensation may provide financial support to the dependents or beneficiaries.

How workers' compensation protects employers 

Liability protection: Coverage reduces the legal risks and potential costs associated with workplace accidents, providing a more stable and predictable business environment.

Improved workplace safety: Policies can inspire or encourage safer workplace practices and reduce work-related injuries and illnesses.

Employee Retention: Top-notch insurers help an employer's commitment to employee welfare by supporting injured workers, which fosters loyalty and reduces turnover. 

What isn't covered by workers' compensation insurance?

Workers' compensation covers injuries and illnesses directly related to an employee's job duties. 

However, several types of incidents and conditions are typically not covered by workers' compensation, including:

Injuries that occur while commuting: Generally, injuries sustained while traveling to and from work are not covered under workers' compensation (often called the "coming and going" rule).

Self-inflicted injuries: Injuries an employee inflicts on themselves intentionally, including those resulting from a physical fight on the job, are usually not covered.

Injuries incurred while violating company policy: If an employee is injured while breaking company rules or engaging in misconduct, their injuries may not be covered.

Injuries incurred while not on the job: Injuries that happen while an employee is off the clock or engaging in non-work-related activities, even on company premises, might not be eligible for coverage.

Stress or mental health issues not related to work: While some states allow for workers' compensation claims based on psychological stress or work-related mental health issues, these claims are often challenging to prove and are not universally accepted unless directly related to the job.

Injuries caused by intoxication or drug use: Injuries sustained while an employee is under the influence of drugs or alcohol and violating company policies are typically excluded from coverage or result in reduced benefits.

It's important to note that workers' compensation laws vary significantly by state, and there may be exceptions or additional exclusions depending on the local legal framework. 

Employers and employees should familiarize themselves with their state's specific rules and coverage details to fully understand what is and isn't covered under workers' compensation.

Who needs workers' compensation insurance?

In most states, the requirement for workers' compensation insurance applies to nearly all businesses that have employees.

Specific rules can vary by state, including: 

• the minimum number of employees needed to mandate coverage
• exemptions for certain types of workers (like independent contractors)
• differences in coverage for specific industries 

It's crucial for business owners to check their state's regulations to understand their obligations and ensure they comply.

Who is covered by workers' compensation? Who is exempt from workers' compensation?

In most states, a business with full-time employees will need workers' comp coverage to protect them. 

Workers' comp exemptions vary from state to state. Numerous factors can also determine who is exempt, such as the type of job someone has and the size of the company.

Independent contractors are responsible for their insurance coverage, including workers' comp, health and liability insurance. 

How do I get workers' compensation insurance?

Employers can obtain coverage by either buying workers' comp with the help of an insurance agent or directly through an insurer's online application.

When selecting a workers' compensation insurance provider, consider factors such as the provider's experience in the industry, financial stability, coverage options, claims process, customer service, and cost. 

We recommend requesting multiple quotes and comparing the offerings before making a decision.

Covering your business and employees with a hard-working partner — like EverPeak — brings peace of mind so you can focus on your bottom line.

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EverPeak Insurance Services assumes no responsibility for the management or control of customer safety activities. Please ensure your business meets the requirements of all federal, state, and local laws, regulations, or ordinances related to workplace safety.

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