Workers’ compensation insurance is a type of insurance that is purchased by employers to cover employment-related illnesses and injuries. While many business owners may regard this insurance as an annoying expense, providing workers’ compensation offers businesses protection against litigation in the event that an employee is injured or gets sick on the job. As a Brooklyn workers compensation lawyer can explain, all states except Texas require that companies have workers compensation insurance. This insurance covers areas such as:
- Medical treatment
- Lost wages
- Injuries arising at work
- Illnesses such as emphysema
Let us review some of the myths and facts that business owners should know concerning workers compensation insurance.
By being in close contact with your employees during their recovery, a business owner can tell when an employee is fit to resume work. Through a “return to work program,” business owners can reduce the number of days lost to illness or injury and thereby increase productivity. Such programs can reduce future increases in workers’ comp insurance. When lost wages are reduced, the claims drop and so do the premiums.
While the laws on workers comp vary by state, many jurisdictions require businesses with even one employee to carry workers comp. Coverage may also depend on the kind of business. For example, the law in Missouri requires most organizations to have a minimum of five employees for coverage to be required. However, for construction businesses, the minimum for required coverage is one employee.
While most states may be covered under workers’ compensation insurance, some states exclude a certain class of workers from coverage. These workers include:
- Independent contractors
- Business owners
- Maritime employees
- Farmers or farm hands
- Railroad employees
- Private home employees
- Casual workers
Since federal government employees are catered for by the federal workers’ comp insurance, they also are not covered by state workers’ comp.
While employees may not be compensated for injuries sustained on purpose, if an injury arises within the scope of one’s employment they will be covered. This is regardless of whether their carelessness caused the accident. However, an employee who sustains injuries while influenced by drugs or alcohol is not covered.
When an employee sustains injuries while working for their employer, even though they were not physically present at the workplace, they are covered. Some examples are a sales person injured at a hotel they are residing at during a business trip, or an employee injured while on a business errand. However, it is worth noting that an employee is not covered by workers comp if they are injured when on break, even though their injuries are sustained on the organization’s property.
Under workers comp, business owners are not fully immune to employee lawsuits regarding their injuries. There are certain exceptions that allow employees to sue their employers. However, these exceptions vary from one state to the other. In some jurisdictions, if an employee sustains injuries due to their employer’s reckless or intentional actions, the employee can choose to bypass the workers comp system. In such cases, an employer can sue their employer in court for money damages, pain and suffering, and even punitive damages. The employee can also sue their employee if they failed to carry workers’ compensation insurance.
Workers compensation insurance is important for any business owner who wants to secure themselves against their employees’ work related injuries. It is important for business owners to familiarize themselves with the provisions of workers compensation in their respective states to be on the good side of the law.