Workmen’s compensation insurance will cover many of the associated costs that occur following a workplace accident. In most states, it’s a legal requirement for you to hold this insurance. Even if it wasn’t legally required, you still should hold a workmen’s compensation policy, as it helps protect your business from paying out of pocket for workplace injuries.
You should also keep in mind that workmen’s compensation does not cover you against liability. If you cause a workplace accident because of negligence, you can still be held accountable.
If this happens, none of the following coverage matters. You will likely have to pay hefty penalties, as well as medical costs, out of pocket. That’s why worker’s compensation is more of a last resort when it comes to workplace accidents: you should always take care to create a safe working environment for your employees.
Read on to see what exactly a workmen’s compensation plan covers!
Wage Replacement and Disability
Workmen’s compensation will provide lost wages to an injured worker depending on their injury. This can be broadly divided into four types of disability.
Temporary total disability means that a worker is completely unable to work for a short period of time. Once they have received treatment or surgery and have spent time healing, they’ll be able to come back to their previous job and work full-time.
This usually works out to two-thirds of what they were making at the time of their injury, though regulations vary by state. There is usually a time limit for how long a worker can be on temporary total disability.
Temporary partial disability applies when the employee is able to go back to work but isn’t making as much at the time of their injury. Again, the injured worker can expect to make around two-thirds of what they were making before. Temporary partial disability continues to be paid until the worker is able to earn at least 90 percent of what they were making before.
Permanent partial disability applies when the injury a worker suffered from will never heal and will always impact their ability to be productive. An office worker that is no longer able to type with both hands would fall under this category, for example. While the disability is permanent, again most states have a legal time limit for how long this disability can be paid out for.
Finally, permanent total disability is when a workplace injury prevents an employee from returning to their job, and will never heal. These injuries don’t necessarily mean that an employee is never able to work at any job again, however. What qualifies as a permanent total disability will vary by state, as will the associated payments.
If one of your workers gets injured on the job, your workmen’s compensation policy will cover the cost of their treatment. However, this only applies to treatment that is medically necessary for that injury. This means things like counseling or experimental treatments that are not yet proven to be effective are usually not covered under workmen’s compensation plans.
Whether you as the employer or your employee is able to choose where to receive healthcare from will depend on the state. Different states will also have different regulations on how much can be charged for medical care relating to workplace injuries.
In a closely related vein to the above point, long-term physical rehabilitation is usually covered by workmen’s compensation. Unlike counseling, physical therapy and rehab are medically necessary. Without them, a worker will be unable to get back into the physical condition necessary to work.
In some cases, rehabilitation benefits will also cover job retraining. This will apply when an injured worker is no longer able to do the same work as before and has to switch to a new position.
If in the unfortunate event that a worker dies because of an accident, workmen’s compensation will provide death benefits to their family. These benefits do two things.
They are supposed to cover the cost of expenses relating to the death, like unpaid medical bills or funeral arrangements. They are also supposed to serve as a way to make up for the lost earning potential of the worker. The benefits serve as a way to take care of dependents until their other guardian is able to find work, or until they are able to take care of themselves.
Depending on the state, death benefits are either provided as a portion of the deceased’s wages, or as a single lump sum. In either case, there is always a minimum and maximum amount that can be provided.
How much a worker’s family receives will depend on a few factors, such as how many dependents they had.
Workmen’s Compensation is a Necessity
In the best-case scenario, no one should have to collect workmen’s compensation. However, workplace accidents do happen, and it’s best to be prepared. There’s nothing worse than for an injured employee to have to go to court to get payments for their medical treatment.
Of course, you don’t want to have to pay out large sums of money yourself in the event of an accident. Workmen’s compensation can protect your business, while still doing right by your employees. It’s a core part of doing good business, and it builds goodwill among your workers.
To get an online quote for workmen’s compensation for your business, feel free to contact us! We serve the Florida area and can answer any questions that you may have.