Workers compensation has always been required by State law for companies that have employees, but as businesses have begun to include even more subcontracted labor, employers have not always kept up with the requirements and implications of not carrying it. It’s important to understand not only what the coverage is, but why it is necessary, and how you can manage its cost.
What is Workers Compensation?
While my focus will be primarily on the transportation industry, workers compensation is a standardized coverage available to all employers in each State in which they conduct business. Quite simply defined, workers compensation pays for the medical expense and an injured employee’s loss of income as a result of an on the job accident. Workers compensation benefits typically cover all medical costs for both emergency and continuing care which may be necessary. Very often coverage is provided without a deductible or limit to care.
A secondary provision of workers compensation is employer’s liability which covers defense and other costs associated with a negligence claim that may be brought pertaining to the circumstances that lead to an employee’s injury. State and Federal guidelines sometimes indicate how certain jobs are to be performed and the precautionary measures to be taken to limit injury. If these guidelines are not followed, it can result in both penalties and a suit against your company for failing to maintain proper or reasonable care.