Every business has the responsibility to create a safe working place. In certain high-risk work environments, accidents and illnesses will inevitably happen no matter how many preventative measures are taken. Depending on the severity, these can be career-altering. Months and years of treatment, recovery, and rehabilitation may be needed.
As far back as 1908, Teddy Roosevelt pointed that it is an outrage that the burden of an injury fall upon the individual and his family. This was the start of Workers’ Compensation.
Workers’ Compensation Definition
Workers’ compensation is a type of insurance that pays monetary benefits to workers who are injured on the job while employed at their company. It cover lost wages while the employee is unable to work, as well as medical expenses, or in the case of a death, benefits to remaining immediate family. This will be provided no matter who is at fault in the accident. Workers accept wage replacement, medical coverage, etc. in exchange for their legal right to sue their employer.
Differences Among Workers’ Comp, Disability, and Unemployment
Workers’ compensation, disability insurance, and unemployment assistance are often confused, although they each serve a different purpose. Unemployment insurance is for loss of a job, not related to a work sustained injury. This type of coverage comes directly from the state government, not employers. The program gives temporary income assistance to workers who are unemployed through no fault of their own and who are able to work, available for work and looking for a job.
Disability insurance provides periodic payments of benefits when a disabled insured is unable to work or perform the core functions of a job – unrelated to how the disability was acquired. Just remember, workers’ compensation is only concerned with a work caused injury and the process needed to resume working in the previously occupied capacity.
Who Needs Workers’ Compensation Insurance?
Workers’ compensation is a state-mandated insurance program, which means all employers in Massachusetts, regardless of industry, are required by state law to have a policy in place covering their, including themselves if they are an employee of their company. In certain cases, corporate officers who own at least 25% interest in the corporation can exempt themselves from the Massachusetts Workers’ Compensation Act.
If you employ workers in multiple states or your employees are temporarily working out-of-state, you need to purchase insurance for all the states where your workers are located, according to each state’s laws. If you work for someone else as an independent contractor, you may need to provide proof of workers’ compensation coverage or potentially be fined. If you work for another entity on a specific project outlined by a contract, then you’re an independent contractor. Independent contractors can’t be terminated at any time unless they violate their contract specifications – they also can’t quit at any time because that would violate their contract.
Buying Workers’ Comp Insurance
Although workers’ compensation insurance is necessary for all businesses, coverage must be bought separately from the business owner’s policy (BOP). It’s in your best interest to make sure it’s tailored to the needs of your industry.
Workers’ Compensation has benefited both the employer and the employee by protecting injured workers with monetary benefits, incentivizing companies to create a safer work environment, and protecting the employer from lawsuits. Buying Workers’ compensation is an important part of your business. If you would like more information about workers’ compensation insurance or you are interested in other business insurance, please contact us at TJ Woods Insurance.
