Cover Expenses Related to Employees
Who Are Injured or Get Sick While on Duty
Workers' compensation insurance, also known as workers' comp, is a legally required coverage (in most states) that protects your employees when they are injured or get sick while on duty.
Workers' Compensation Insurance Covers
- Medical expenses
- A portion of lost wages
- Death benefits
It also protects your business when an injured or ill employee sues you, by covering the resulting legal fees or settlement costs.
Some Common Workers' Compensation Claims
- Injuries caused by overexertion
- Slips and falls
- Being struck by falling objects
- Accidents that occur while operating heavy machinery
- Illness induced by prolonged exposure to harmful chemicals at work
- Cuts and lacerations
Although independent contractors are generally not required to purchase workers’ comp coverage, having this policy might help them in a few scenarios, such as:
- To fulfill the terms of a contract -especially the ones involving high-value clients
- To cover their medical bills and lost wages
You may be required to carry workers’ comp coverage for hired subcontractors, depending on your state’s laws. If your state classifies hired subcontractors as employees, you will need to get a workers’ comp policy to cover them.
There are no set rates; instead, the cost of coverage will depend on factors such as:
- Number of employees working for you
- Claims history
- Location of business
- Industry in which you operate
- Exposure to risks
A standard workers’ compensation insurance policy will not cover injuries that are
- Received during a fight initiated by the injured employee
- Caused by the employee’s own negligence
- Sustained by the employee while in a state of intoxication
Although both the policies pay for medical expenses related to injuries sustained at your business, general liability insurance will not cover employee-related injuries/illnesses. Having a workers’ comp policy allows you to extend protection to your employees, thus saving you from paying out-of-pocket expenses to cover their medical bills or other expenses.