All workplaces claim to be able to prevent an accident from happening. Unfortunately, most tend to underestimate how they can happen and people eventually get hurt.
This is where workers comp insurance steps in. In 2015 workers comp paid a total of $61.9 billion to employees. This type of insurance for employees was put in place to protect them or their family financially while a work injury heals. If you have more than 5 employees you need to consider a comprehensive safety and risk management plan.
We're going to explain what this commercial insurance policy covers and why you need your business to invest in safety.
What is Workers Comp Insurance?
If your company has employees, you need workers compensation in your company insurance policy package. This type of liability insurance will cover the expenses in the event an employee becomes sick or hurt while on the job. Depending on the size of your company or the risk of your industry, it can be a very expensive, but necessary coverage. Check out how important cost savings for workers comp is in one of the most expensive industries in Colorado, roofing insurance.
What Does It Cover?
This coverage applies no matter who is at fault for the injury. Medical treatments as the result of an injury or illness at work or on work property qualify for workers comp.
Employees can also recover lost wages as a result of missing work. This is often a lifeline for industries such as Trucking & Hauling because of the inability to work altogether after accidents. If the tragedy of a death occurs, benefits will apply to the dependants of the deceased employee.
Recent Expansion of Coverage
In recent years the types of claims covered have expanded. Injuries now include psychological stress-related injuries.
Employees have also been successful with claims for injuries outside the scope of work. This would include injuries sustained while playing on the company sports team.
Types of Claims
Claims fall into four main category types. Accident or injury, occupational illness, repetitive stress injury, and disability are all covered.
What It Does Not Cover
Self-inflicted injuries are not covered. Injuries that happen while the employee is not on the job.
Injuries as a result of the employee not following the company policy. Injuries from the employee committing a crime are also not covered.
Worker's comp doesn't cover claims of general pain and suffering. Employees can not recover punitive damages for negligence either.
Benefits to Employees and Employers
Employees agree to not sue their employer for negligence when using this insurance. This relieves the employer of fear of litigation from an injured employee.
In some states, the amount an employee can recover is also limited. This lets a company budget for the potential of a claim.
Employees have the security of knowing their medical bills and lost wages qualify for coverage. This gives employees a guaranteed viable recourse for injuries and illness.
Co-workers have protection from liability through workers comp. This allows employees to not worry about potential lawsuits from fellow employees.
Recklessness Caveat
Some states do not allow companies to avoid responsibility for reckless or intentional actions. Some states also allow third parties such as a subcontractor to be liable.
Is it Required?
Many states require workers comp insurance. Some states have specific guidelines companies need to meet to be exempt. Colorado has a mandatory workers’ compensation requirement as soon as 1 employee is on the payroll, even if it’s an unpaid intern. Some other states like Arizona have readily available coverage options for contractors or subcontractors.
The goal is to reduce the need for litigation between employees and employers. You need to check the requirements for your state. Some impose heavy fines for failure to provide worker's comp. Treat your company’s workers compensation policy like a benefit to the employees as well as the long-term health of the company.
Protect Your Company and Employees
The experts at Alliance have built their careers on developing extraordinary risk management packages for companies and small businesses throughout Colorado and many other states. The policies that get the Alliance approval are tailored to your business, with a thorough communication of your risks and coverages.
Reach out today to get insurance for your company with comprehensive commercial insurance from Alliance.