what is workers compensation
what is workers compensation

clock February 17, 2020

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What Is Workers Compensation? Overview and Benefits

Did you know that workers’ compensation insurance protects 138 million US workers? That’s right.

That number represents almost all employees in the country. After all, workers’ comp is a legal requirement in almost all states, except Texas.

In Florida, only a select few employers aren’t required by the law to purchase this coverage. The law requires most employers to provide this to their hardworking people.

Yes, these include the employees of the over 400,000 small businesses in Florida.

As a new employer yourself, you’re likely wondering, “What is workers’ compensation?” What benefits does it provide and who exactly benefits from it?

We’ll get you the answers you’re looking for in this post, so be sure to read until the end!

What is Workers’ Compensation? A Brief History

Before 1911, workers who became injured or ill at work had to sue their employers. Meaning, they had to go through legal steps first before they could get compensation.

Sued employers also had their own losses under the tort system. They faced not only costly penalties but also the costs of retaining legal aid.

Since this was a lose-lose situation for both ends, states had to devise a better solution. Finally, in 1911, Wisconsin passed the first comprehensive workers’ compensation law. Other states soon followed, with Mississippi being the last in 1948.

Since then, workers’ comp has gone through several changes and improvements. The modern version, however, stays true to the original one’s goals.

First is to ensure that workers obtain prompt and fair medical treatment if they get injured or ill at work. It also makes sure that workers receive fair monetary compensation in such cases.

At the same time, workers’ comp protects employers from legal liabilities. It establishes the limits on employer obligations in case workplace accidents occur.

What Are the Specific Requirements for Workers’ Comp in Florida?

Florida workers’ comp requirements vary based on the type of industry. For example, all construction businesses need workers’ comp. Even if you’re the sole employee of your own construction business, you need the coverage.

Workers’ compensation coverage is a must for all other businesses with four workers. Those four may include you, the owner. You may elect not to include yourself, but you first need permission from the state.

What Does Workers’ Comp Cover?

Today’s workers’ comp benefits include coverage for medical expenses and lost wages. It also provides death benefits and vocational rehabilitation.

Do Workers’ Comp Only Cover Injuries or Illnesses that Happen at the Workplace?

No. Workers’ compensation covers any illness or injury related to a covered employee’s job. This applies to diseases or injuries that happen even outside of the workplace.

For instance, an employee gets injured while traveling for business purposes. They can file a workers’ comp claim to get coverage for their hospital and medical bills. They may also receive disability payments if they can’t work due to their injury or illness.

Workers’ compensation benefits also cover injuries that occur during a required company event. So long as the injury or illness is work-related, then workers’ comp should cover it.

Workers’ comp also provides coverage for long-term job-related injuries and illnesses. An example is repetitive strain injury, such as tendonitis or carpal tunnel syndrome. Muscle sprains from overuse or overexertion are also common workers’ comp claims.

How Do Employers Benefit from Workers’ Comp Then?

At this point, you may be thinking that workers’ compensation only benefits employees. While it’s indeed worker-centered, you, as the employer, will also benefit from it.

Here’s how.

Protection from Lawsuits

By protecting your employees with workers’ compensation, you also protect yourself from lawsuits. This may happen if an employee (or their family) sues outside of workers’ comp. Workers comp will help cover your legal expenses in case this occurs.

Avoid Hefty Civil Penalties

In Florida, not carrying the required workers’ comp can lead to fines and stop-work orders. For a first offense, the fine could be twice as big as the yearly workers’ comp premiums. The accompanying stop-work order requires the business to cease its operations ASAP.

To resume operations, the business must settle the fine first. It also needs to purchase the mandatory coverage. Only then can it resume operations.

As you can see, failure to carry workers’ comp could be very expensive. Not only because of the fines but also because of the lost business days.

Key to Retaining Your Workers

Did you know that losing an employee could rack up at least $3,500 in turnover costs? Hiring a new employee, after all, would mean shelling out money for training. A business also loses potential profits due to that vacant position.

Without workers’ comp, you could end up losing your employees and money on turnover costs. If they get injured and they don’t have coverage, they may not be able to afford their medical bills.

Ass a result, it may take them longer to recover from their injuries or illness. This may even cause them to quit their job. 

You, on the other hand, would be lacking a worker who is crucial to your operations.

This further highlights the win-win situation of having workers’ comp. Your people can get the healthcare services they need for an injury or illness. This then translates to faster recovery, which means they can go back to work for you sooner. 

Workers’ Comp Coverage Benefits Everyone

There you have it, the complete answer to your question, “What is workers’ compensation?” Now that you know its roles and that it also benefits employers, you should purchase it for your people ASAP. The sooner you do, the sooner you can also protect your rights as an employer.

Ready to find a great deal on your comprehensive workers’ comp coverage? Then request your free quote from us now! Feel free to get in touch with us too if you have any more questions about the Sunshine State’s workers’ comp laws.

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