Workers’ compensation insurance provides cash benefits and/or medical care for workers who are injured as a direct result of their job. More specifically, workers’ compensation laws give employees the right to collect for injury, disability, or death that occurs in the course of employment. Workers’ comp laws today are no-fault laws.
No-fault compensation is based on the principle that injured employees are entitled to receive compensation for their injuries without proving fault against the opposite party.
The amount that an employee making a claim receives isn’t impacted by any potential carelessness or negligence on their part. However, a worker loses the right to compensation if the injury is a direct result of being under the influence of drugs or alcohol, or of an attempt to injure themselves or others.
Benefits provided in the workers’ comp insurance are the only benefits—called the exclusive remedy—available to employees. Employees can’t sue employers in court for additional benefits.
Who pays for workers’ comp insurance?
Employers pay for workers’ comp insurance. Employees do not cover workers’ compensation costs. The cost to the employer is passed on to consumers or clients in the prices the business charges for its products or services.
How are workers’ comp claims paid?
A workers’ compensation claim is paid if the injury is compensable, meaning the employer and insurance carrier agree that the injury is work-related and covered by the policy. If the insurance carrier disputes the claim, no cash benefits will be paid until the state workers’ compensation board, mediator, or judge determines who’s right. If a worker is not receiving benefits because an employer or insurance carrier is in the process of disputing an injury, the worker may be eligible for disability benefits in the meantime. Any payments made under the disability program, however, will be subtracted from future workers’ compensation payments.
What is a Workers’ Compensation Board?
Weekly cash benefits and medical care are paid by the employer’s insurance carrier, as directed by the state workers’ compensation board. The board is a state agency that processes the claims. It determines whether the insurer will reimburse for cash benefits, medical care, or both, and the amounts payable.
What if the employee is able to work?
If the employee can return to work but cannot earn the same wage as a result of injury, the employee may be entitled to a benefit that will make up two-thirds of the difference. The employee also may return to work in light or alternate duty while healing.
Thanks for reading! Please note that this content is intended for educational purposes only. As laws change regularly, you should refer to your state legislation and/or an advisor for specific legal counsel. If you’re a small business owner, learn more about workers’ compensation insurance or check your current rate in 3 minutes.