Businesses need worker’s compensation insurance for a couple of very important reasons.
First, it’s required by law. Every state has different requirements and penalties associated with worker’s compensation coverage. In Louisiana, for example, all employers with one or more employees making $3,000 or more a year are required to carry worker’s compensation insurance. Business owners can be penalized with a fine for each employee for which they do not purchase worker’s compensation.
Second, it ensures that your employees will be covered in case of an accident or injury without the financial responsibility falling on your business. When employees accept worker’s compensation benefits, they give up the right to hold your business and its owners and managers liable in a civil suit in case of an on-the-job injury.
This benefits both the employees, who can rest assured that their medical expenses will be paid without a lengthy legal battle, and the business, which will not need to face financial ruin if the worst should occur.
What is Worker’s Compensation Insurance?
Worker’s compensation insurance is a type of insurance that covers medical expenses and lost wages for people who are injured while at work. It is a form of financial protection given to the employee in exchange for their right to sue the employer for negligence in the case of a workplace accident. This includes permanent partial disability, temporary disability, injuries, and illnesses.
Workers’ compensation insurance is not the same as disability insurance. Disability insurance provides partial lost income replacement protection for the covered individual in the event they become disabled and unable to work.
Benefits are paid to the disabled person regardless of where the incident that caused the disability took place. Except in California, Hawaii, New Jersey, New York, and Rhode Island, disability insurance is not required by law for employers to carry.
Unemployment Insurance is also sometimes confused with Worker’s Compensation Insurance. Unemployment is another type of insurance that is required by the government for employers to carry in order to protect their workers. Employees who lose their jobs are able to claim unemployment benefits as a temporary means of income replacement.
How Does Worker Compensation Work?
For on-the-job injuries to be covered by worker’s compensation insurance, there are a few important steps that need to be followed. In Louisiana, employees need to report accidents within 30 days.
They need to keep documentation of the medical care provided in order to file a claim. For injuries that don’t require an emergency room visit, check your policy to see if there are specific doctors that should be seen in order to ensure coverage.
Once all the relevant information has been collected from the injured employee, the employer then files a claim with their insurance provider. The insurance policy covers all expenses from the initial visit to the doctor through the last follow-up treatment in the recovery and rehabilitation process.
There are a few notable types of on-the-job injuries that are not covered by workers’ compensation insurance. Among these are psychiatric conditions, self-inflicted injuries, and accidents that occur as a result of employees not following company safety procedures.
Is Worker Compensation Taxable?
In most cases, money received from worker’s compensation insurance benefits is not subject to federal or state taxes. The exception is if a person is also receiving disability insurance, in which case part of the worker’s compensation benefits may be taxed.
Get Your Employees and Your Company Covered Today
Having proper workers’ compensation coverage should be a major priority for every business owner. For a trustworthy agent of worker’s compensation and other types of business insurance in Lafayette, Franklin, and Abbeville, LA, contact us at TSL Insurance Group.
When you experience first-hand how easy it is to get the best quote and coverage you need with TSL, you’ll see why we’ve been a highly rated independent insurance agent for more than 50 years.
Three Reasons Why You Need Workers’ Compensation Insurance https://www.employers.com/blog/2016/three-reasons-why-you-need-workers-compensation-insurance/
Rights and Responsibilities in Workers’ Compensation https://www2.laworks.net/FAQs/FAQ_WorkComp_RightsAndResponsibilities.asp#answer_2