Workers Compensation

Workers' compensation laws vary by state and they were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.

Workers' Compensation Insurance is designed to help employers pay these benefits. As a protection for employees, most (but not all) states require that employers carry some form of Workers' Compensation Insurance. Workers' Compensation Insurance is not health insurance. Workers' Compensation is designed specifically for injuries, illnesses and diseases sustained while on the job.

In most states, if you have employees, you are required to carry Workers' Compensation coverage, however, even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities. In states such as Texas, if you don't carry workers' compensation coverage and an employee is injured, you are 100% legally responsible for ALL medical bills related to the injury (now and in the future), lost wages, and you are wide-open to lawsuit and litigation (with uncapped monetary awards and punitive damages) from the injured employee as well as third parties, such as a spouse. You also are prohibited by law from using defenses such as 'contributory negligence' and general liability and no other insurance will not pay for any of these expenses - only workers' compensation insurance does that.

Do I need workers' compensation insurance?

Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.

To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they're hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.

Workers' compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.

Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Workers' compensation insurance must be purchased as a separate policy and the premium (cost) is based upon payroll amounts and what activities it is that your employees perform.