What does workers’ compensation insurance cover?
A workers’ compensation insurance policy can help cover expenses from workplace injuries including medical expenses, employee lost wages, vocational rehabilitation, permanent injury benefits, survivor benefits, and legal fees. The policy is intended to cover a business’s financial liability under workers’ compensation laws within the states in which they operate. The coverage details will vary from state to state.
Medical expenses will vary from injury to injury, but a workers’ compensation insurance policy will typically cover all medical expenses that are related to the work injury and allowed by the state in which you operate. This typically includes physician evaluations, immediate hospital bills, surgery, ongoing medical treatment, and physical therapy or rehabilitation charges.
For example, if your office manager starts getting work-related wrist pain and their physician diagnoses them with carpal tunnel, workers’ compensation insurance will pay for the doctor visits, follow-up treatment, and suggested physical therapy.
When an injury keeps an employee from being able to do their work, workers’ compensation can help pay for a portion of their lost wages until they are physically able to return to their job duties. This allows employees to take the appropriate amount of time to heal without risking additional injuries from trying to return to work before they are fully ready.
From the previous example, if the office manager needed time off for surgery to alleviate their carpal tunnel, workers’ compensation insurance would pay a portion of their salary while they recovered and were unable to work. The percentage of salary covered varies in each state. For example, in Vermont, it is most common to receive 66.67% of the average weekly wage.
When an injury is serious enough to prevent an employee from ever returning to their previous job, workers’ compensation insurance can pay for that employee to learn new skills. This will allow them to enter a new field of work that better suits their abilities after a substantial injury.
For example, an electrician has ongoing work-related leg pain that is preventing them from going out into the field. A workers’ compensation insurance policy can cover computer skill courses to transition them into an office role.
If a workplace injury is serious enough that an employee has a permanent impairment, workers’ compensation insurance can provide long-term disability benefits. These benefits vary by state of operation and severity of the injury.
In the unfortunate case that an employee passes away in a work-related incident, workers’ compensation insurance will cover funeral expenses and ongoing financial assistance to their family.
Depending on policy details, workers’ compensation insurance can also provide business owners with coverage from lawsuit expenses resulting from employee workplace injuries. These can include attorney fees, court costs, and potential settlements or judgments at the end of a trial.
What does workers’ compensation insurance NOT cover?
Generally, workers’ compensation insurance will not cover workplace injuries to independent contractors, if the employee is found negligent, or if they went against established company safety policies. Some scenarios that workers’ compensation insurance will not cover are:
- Injuries due to intoxication
- Customer or client injuries
- Injuries due to self-started altercations
- OSHA fines
- Cost to hire replacement labor
- Injuries sustained in the act of a crime
- Self-inflicted injuries
- Injuries to independent contractors