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What is workers’ compensation?
Commonly known as workers’ comp, this is a form of insurance that protects workers in the event of an on the job injury.
Workers’ comp provides assistance to employees injured in the course of employment in exchange for mandatory relinquishment of the employee’s right to sue their employer for negligence. The trade-off between assured, limited coverage and lack of recourse outside the worker compensation system is known as “the compensation bargain.”
Who Needs It?
Nearly every state requires that employers carry workers’ comp to protect themselves and their employees. Some states don’t require it if you only have part-time employees.
While some states don’t require workers’ comp in all industries, there are other fields that require workers’ comp, even if a business has no employees. Many states have special requirements for all construction businesses to carry workers’ comp, even if the business has a single owner and no employees.
If you hire subcontractors, you should always check for proof of workers’ comp in order to avoid liability.
What’s Covered?
Workers’ comp protects employees injured in the course of employment. It covers multiple types of care and compensation.
- Medical Expenses
- Rehabilitation and Physical Therapy
- Partial Lost Wages (About ⅔, varies by state and conditions of employment)
In addition, if an employee dies while at work, workers’ comp covers the cost of the funeral and compensation for the deceased’s immediate family.
What’s Not Covered?
While workers’ comp will cover most work-related injuries and accidents, some situations are not covered:
- Injuries during the commute
- Intentionally self-inflicted injuries
- Injuries from fights/violence initiated by the employee
- Injuries from horseplay or workplace safety violations
- Drug or alcohol related injuries
