Workers compensation insurance

What is workers compensation?

Since it can be expensive and time-consuming to determine whether an injured employee or the employer is "at fault" in a work-place accident, workers compensation laws provide a consistent and fair way to handle the costs and compensation of work-place injuries and occupational diseases. To receive workers compensation benefits, the injury or illness must have occurred due to a work-related event.

Workers compensation laws are found in all states.  Laws in most states require workers compensation once a business has reached a certain number of employees. There are two central parts to the workers compensation agreement:

  • No matter who is at fault, the cost of the injury is always charged to the employer. This avoids the need for lengthy court proceedings.
  • The workers comp benefits are the only benefits the employee can receive from the employer. In other words, the injured employee cannot sue the employer for more money.

How workers compensation works

With a workers compensation insurance policy, the employer transfers the financial risk to the insurance company and avoids committing their own assets to pay the expenses. The workers compensation insurance policy covers these expenses including:

  • Lost wages and benefits
  • Medical care and rehabilitation services
  • Legal representation and compliance services

A workers compensation policy provides the employer with two types of coverage:

  • Workers compensation pays the compensation and other benefits required by each state's workers compensation laws.
  • Employers liability covers the employer for legally obligated sums, subject to policy limits.

Why does the employer need employers liability insurance? Because workers comp does not cover all employment situations. There are also exempt employments, illegal employments, and non-compensable injuries. An employee who falls into one of these categories may sue the employer directly!

In addition, a good workers compensation policy allows for the use of Medical Case Managers to help control costs by handling the claim and coordinating return-to-work and light-duty programs. The policy should also include a "payroll audit" to make sure the premium reflects the employer's actual payroll.  This ensures that the employer is not paying too much or too little.

Insurance and coverage are subject to availability and qualifications and may not be available in all 50 states.  Coverage may not be available for all business types. Contact a Markel Specialty agent for more information. Insurance is underwritten by Markel Insurance Company, Glen Allen, VA.

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