The Importance of Knowing your Clients’ Business Philosophy & Risk Appetite and Why
What is Workers Compensation
Workers’ compensation, also referred to as workers comp, is a type of insurance that employers provide to employees.
This form of insurance offers employees that were injured on-the-job wage replacement and medical benefits. However, this occurs in exchange for compulsory relinquishment of their right to sue their employer for negligence.
Workers Compensation in the United States
Workers’ compensation or work comp is compulsory in all states of the United States, with the exception of Texas.
All employers in America are required to offer some form of workers’ compensation to their employees. Some employers go above and beyond compulsory coverage, and also offer non-compulsory coverage.
Alternatively, employers that have adequate funds may opt-out of third-party insurance by choosing to provide self-insurance instead – granted they are able to prove it.
Workers Compensation Benefits
Workers’ compensation coverage typically offers employees five types of benefits.
Medical Treatment
In the event of a work-related injury or illness, workers’ comp will cover your medical treatment. It is important to note that employees will not be able to receive medical benefits for injuries or illnesses that are not related to their employment.
Temporary Disability Benefits
This consists of payments to cover the cost of lost wages during an employee’s recovery period.
Permanent Disability Benefits
This type of workers’ compensation makes provision for employees with permanent work-related disabilities or injuries.
Vocational Rehabilitation
Vocational rehabilitation or voc rehab entails various processes related to the retraining, rehabilitating, or upskilling of an ill or injured employee in order to allow them to return to work or find suitable alternative employment.
Death Benefits
Death benefits refer to payments that are made to an employees’ next of kin following death from a work-related illness or injury.
Conclusion
At the end of the day, workers’ compensation coverage offers benefits to both employers and employees.
On the one hand, employers are fulfilling their legal obligation to pay employees for the time that they are unable to be at work, their medical care, as well as any vocational rehabilitation that is required.
On the other hand, employees are guaranteed to be compensated for covered injuries or illnesses.
Both parties are protected from costly and lengthy legal battles.
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