How worker’s compensation insurance helps your business
It’s crucial that businesses understand what worker’s compensation insurance is and why they need it. The law does require many companies to have worker’s comp because if they didn’t, their workers could not do their jobs confidently. They would not have the safety net they need, and if something happened to them, they might quickly become destitute.
We’ll explain in this article what worker’s compensation insurance does and why it is as beneficial to businesses as it is to the workers it protects.
Work Injury Compensation Form Concept
What exactly is worker’s compensation insurance?
Worker’s comp is an insurance variety, one of many that businesses should have. Depending on what your business model is, you might also have company vehicle insurance, work stoppage insurance, product liability insurance, and more.
As for worker’s comp, the general idea is that your employees can be eligible for it if they got sick or injured while on the job. For example, maybe your worker slipped and fell while at your brick-and-mortar location. In that instance, it seems likely they would be eligible for worker’s comp.
Your employee would probably also be eligible if another vehicle hit them while they were driving a company car on a work-related trip. There are plenty of other instances where they will be qualified as well. The point is that they’re doing something work-related when they injure themselves rather than sitting at home, off the clock.
There are occasionally exceptions where the employee hurts themselves at work, but they caused the accident that harmed them. For instance, if they come to work intoxicated and cut or burn themselves, the law might not allow them to collect. Sometimes there is no-fault worker’s comp insurance, but that varies state by state.
How much a person can collect also varies. For instance, in Pennsylvania, the maximum weekly benefit is $1,081, according to the Department of Labor and Industry. That will change according to whether you make more or less than that per week.
What does worker’s comp cover?
As your employees learn more about worker’s comp, they’re probably curious about what it can cover. There are several areas where it can help not just the affected employee but also their family members.
It might cover death benefits. That can happen if the worker dies within 300 weeks from the time they suffered a work-related injury. The idea here is that the benefits are paying for their financial support loss and funeral expenses.
If your employee loses a body part while on the job, worker’s comp can cover that as well. Most policies offer a specific amount depending on the body part they lost.
Lost income is one of the most common things that this insurance type can cover. If someone does get hurt while on the job or they become ill, your employee can collect worker’s comp to cover part of their lost income while they recover.
Medical costs are one more thing with which this insurance can help. Maybe your worker needs doctor’s appointments following a workplace injury. They may need to recoup surgical costs. Perhaps they need that money to cover medication, physical therapy, hospitalization, and so forth.
What does this insurance type do for your business?
It seems clear what worker’s comp can do for your workers. But how about what it can do for an employer?
Workers understand that accidents can happen anywhere. When they’re on the job, they might feel like they’re doing work that is not particularly dangerous. Still, some unexpected incident can injure them. If that happens, they’ll be glad to know that there is an insurance policy in place to protect them.
If they ask you during an interview whether you have a robust worker’s compensation policy, you can tell them that you do. They’ll be glad to hear that, and they likely will have no issues working for you then.
What’s even more critical, though, is if you have worker’s comp and the jobs you provide are inherently dangerous. Think about if what you have on offer are construction industry jobs.
Maybe your employees work around large, hazardous machines all the time. There is a very real risk element that it’s impossible to disregard.
If they know that you have worker’s comp in place, that might be what convinces them to take the job. They know that if anything happens to them, the insurance will help both them and their families.
Statutory obligations
Statutory obligations are the other reason why companies want to have worker’s comp insurance. A statute is similar to a law. It is a behavioral code that dictates how a person or business behaves.
Statutes might be similar in different regions, but they are seldom identical. You might find some statutes on the books in different states that do not exist in others, often based on historical events that led to that state’s governing bodies setting a precedent.
A statutory obligation essentially tells a business how to conduct itself. In many instances, they have a law’s same legal power.
Most states will say that a business has a statutory obligation to have a certain amount of worker’s comp insurance. Once you know that you have that in place for your company, you can hire employees and go about your business model confidently. You know that you have a policy in place of which the state approves, and they won’t try and fine you or otherwise penalize you.
Both employees and bosses or business owners hope that they never have to utilize their worker’s comp insurance. This is usually true for most other insurance types as well. These policies are in place for when the unexpected happens, and hopefully, it never will.
However, a job-related injury can occur when a worker least expects it, and if it ever does, they’ll be happy to know that the policy is there to help them. If you’re about to open a business, make sure you have a satisfactory worker’s comp policy in place.
