Worker's Compensation (WC)
Workers’ compensation insurance covers the expenses that come with an employee’s work-related illness or injury as well as lost wages and rehabilitation costs. Under normal circumstances, the fault does not matter in a workers’ compensation claim. In most states, you are required to carry workers’ compensation coverage if you have employees. Each state has different laws governing the amount and duration of lost income benefits as well as the provision of medical and rehabilitation services. Nonetheless, the National Council on Compensation Insurance (NCCI) serves as the policy standard for most states.
Workers’ Compensation Insurance may cover:
- An injured employee’s medical expenses/treatment
- Rehabilitation and on-going care
- The replacement of lost wages from time-off due to injury
- Death benefits to support the deceased’s family
- Funeral expenses, if an employee is killed on the job
Workers’ compensation coverage allows business owners to be protected from civil lawsuits filed by their employees who become injured on the job. It also pays death benefits to families of employees who are killed on the job and helps control the financial risks for businesses since many states limit the amount an injured employee can recover from an employer. Part one of the policy covers the employer’s statutory liabilities under worker’s compensation law, while Part two covers liability arising out of the employees’ work-related injuries that do not fall under the worker’s compensation statue.
Workers’ compensation Insurance may not cover OSHA penalties, third-party lawsuits, wages for a replacement worker, parental leave benefits, and lawsuits over professional errors. Premium for workers’ compensation insurance is largely dependent on the job classification and annual payroll.