Workers compensation laws are intended to ensure the appropriate level of coverage is provided to employees who are injured on the job. These same laws also provide consistency and fairness in how costs associated with an employee’s workplace injury is managed. There are incredibly specific laws that regulate how workers compensation claims are administered and there are penalties associated with not adhering to them. This is why many employers work with workers compensation insurance companies to manage their claims.
How Workers Compensation Insurance Works
Workers compensation insurance policies transfer any financial risks to an agency’s insurance company so they don’t have to deal with it themselves. There are several different kinds of expenses that are traditionally paid out by workers compensation insurance companies.
Workers Compensation Costs
There are explicitly defined costs that workers compensation insurance policies will cover.
Medical care and treatment
Employee’s cost of lost wages
Cost of medical benefits
Legal representation and other related fees
Benefits of Workers Compensation Insurance
In addition to not having to manage claims and ensure legal compliance, there are other benefits to having a company manage workers compensation claims. Workers compensation insurance helps ensure that employees are not allowed to sue their employers for any additional money, beyond what is already being provided.