Workers Compensation Insurance

Written by

sandhya dubey

[Summary: Workers’ Compensation Insurance protects workers/employees under state laws. The insurance basically compensates the workers (with medical care & reimbursing lost wages) if they got any injury at their job. The business management owes to rehabilitate his/her family financially if the worker dies during the treatment.

Furthermore, this insurance, bought by the businesses protects them from lawsuits i.e., facing any legal allegations by the workers/or their families under concerning circumstances.]

You may learn about workers compensation insurance, from these books.

A brief history of Workers’ Compensation Insurance

Note: if you are not interested to read about the brief history of workers’ compensation, you can jump to its definition & other crispier part. And if you’re excited to know about it, you’re welcome, friend!

Beginning of workers’ compensation in the United States?

At first, Wisconsin deployed the workers compensation in 1911. After which 7 other states in the US introduced the policy in the same year.

Work injury insurance was first, introduced in Germany in 1884. By the middle of the 20th century, the majority of the nations had deployed the Compensation Act.

Workers Compensation Insurance Definition

As per Nationwide, workers’ compensation insurance can be defined as follows: “Workers’ compensation provides medical costs, lost wages, & cost of rehabilitation to the employees who get injured- in the course & scope- of their job. It would also pay death benefits to their families in case of death circumstances.”

Why it is important?

Workers’ compensation is mandatory in almost all countries over the globe (including India) irrespective of the number of employees your organisation have, one, one hundred, or lakh, or even more.

Paying adequate compensation to employees for on-job risks safeguards both, the employee & the employer. While employees’ benefits are easily understandable, let’s understand employer’s benefits which is hidden behind a thin curtain.

What benefits does an employer reap through workers’ compensation insurance?

The question has a very easy answer. Look, every country or state has made some norms/laws to be followed by an organisation or a business.

Paying adequate compensation to employees for workplace hazards is one of them. It is mandatory for business houses in many countries. Workers’ Compensation benefits the business owners in the following ways:

• Meeting the laws: Many countries in the world including the US, UK, Australia, & India have instructed all businesses to ensure workers’ compensation in their system. India mandates the policy as per the Employee’s Compensation Act, 1923 & Indian Fatal Accidents Act, 1855.
• Inclusive protection for employees: It also saves companies from huge liabilities that the injury/death of one of its employees can cause. Worker’s compensation insurance helps companies to get these liabilities covered– through small investments made.

What does a workers’ compensation insurance policy cover?

A workers’ compensation policy usually covers the following conditions to take care of:

• Injuries & damages to a worker because of an accident at the job (or because of conditions at the job)
• Treatment of a disease which got provoked because of circumstances at the job station.
• Partial/complete disability caused due to job-related harms
• And the death under such circumstances

What does this insurance policy NOT cover?

Here’re the conditions that a workmen’s compensation policy doesn’t cover:

• The accident caused by ignoring the safety protocols at the work-station
• An accident due to the use of alcohol/drugs
• Accidents that didn’t cause any disability for more than 3 days
• Injuries that are made due to a fight or other irresponsible actions

In the United States, this is under State laws. And thus, the benefits vary from state to state. Here, Texas is the only state which doesn’t require their employers to maintain this compensation policy.

What if the business ignored this compensation or their safety measurement?

If a business fails to provide workers’ compensation insurance or fails to give proper safety measures to its workers, it can face serious penalties.

• For example, paying claims out of its own pocket and fines. And probable imprisonment. They might lose the right to operate any business further in that state- depending upon the actions taken by the state law.

US Bureau of Labor Statistics (BLS) reported the total rate of injuries at workplaces was 2.8 i.e., approximately 3 for every 100 full-time employees in 2018.

Also, as per OSHA reports (in 2018), most fatalities were seen in the construction industry, industrial workers which included falls, struck by an object, caught between two objects, electrocution, etc.

These data (along with other research & experts’ advice) help the law, state authorities, & government bodies to make changes in the compensation act. Occasionally. Because data tells the real story.

Note: Workers’ compensation insurance is not the same as Disability Insurance or Unemployment Benefits.

How to claim this compensation?

The very first step is to visit a healthcare expert & get the medical reports in hand. These medical documents would help you to support your claims. Now you’ll need an expert’s help to file other mandatory paperwork. For example, an insurance advisor or a claim-settling agency.

Once you perform the legal steps systematically, your claims will get approved. You’ll get your compensatory payments soon.

Finally, once you’re recovered fully, you can return to your work.

Famous & interesting cases that are a must-know

• Manager saves fries hurting her neck: In an interesting workers’ compensation case, the restaurant manager claimed that she hurt her neck when she bent to catch the bag of fries falling. The court accepted her argument as she caught the injury in the course & scope of her job. Due to that sudden bent & jerk.
• Woman Drinks Lye: Laura McRae (an Arby’s employee) drank from the wrong cup mistakenly- when she was in the break room during her break time in the office. She sipped that cup of Lye which was kept in the break room for unknown reasons. This caused a high burning sensation in her esophagus. The company fulfilled all compensation & reimbursement bills.
• Note: Lye is a highly alkaline chemical solution. It can cause skin irritation (in direct contact cases) or burning in the organs if drunk mistakenly. It might be fatal in some extreme cases.

The Bottom Line:

Summing up, Workers’ compensation insurance protects workers under state laws. It provides medical care when a worker gets injured on the job; disability, and rehabilitation through reimbursing lost wages, or benefits to the family in death circumstances.

The insurance also keeps the interests of both parties (the employee & the employer) safe. Worker’s compensation insurance protects workers’ fundamentals. Further, it also saves the employer from legal costs if sued by the workers.

sandhya dubey @sandhyadubey

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