Worker’s Compensation

Every organization in the United States that has employees is required by law to carry Worker’s Compensation insurance, with very few exceptions.

Sprain of a foot

The requirements vary by state. The definition of an employee can vary by state as well.  Be careful.  In some cases, sub-contractors paid on a 1099 form are required to be included on your Worker’s Comp policy.  The maximum amount of payment for injuries and lost wages are also State specific. Please review your coverage with your licensed insurance agent.  They can advise you correctly if you have employees who work in multiple states, or states other than the one where your business is domiciled, or if you employ subcontractors.

In most states, Worker’s Compensation and Employer’s Liability coverage are included together in one policy.  In Ohio, North Dakota, Washington and West Virginia, they are both needed but purchased separately.

Worker’s Compensation provides for an employee’s medical coverage and lost wages while they are unable to work due to an on-the-job injury.  In most cases, the medical bills and lost wages are paid by the Worker’s compensation portion of the policy and there are no resulting lawsuits.

However, if the employer can be held liable in any way for the injury, it may be possible for the employee to bring a lawsuit against them. In this case, the Employer’s Liability portion of the policy would step in both to offer defense coverage and settlement payment on behalf of the employer.  In most states, Worker’s Compensation and Employer’s Liability coverage are included together in one policy.

Simple steps such as providing employees with a list of recommended physicians (commonly known as a Physician’s Panel) and offering light duty so that they can return to work sooner, can all help with alleviating the severity of worker’s compensation claims.