What Is Workers Compensation?
Essentially, workers comp is a type of insurance purchased by you, the employer, to cover employment-related injuries. Workers comp is not a voluntary system, except in the state of Texas where it is possible to opt out. In the event of an injury on the job, the employee will receive the benefits and in exchange give up their right to sue you for the tort of negligence.
Workers comp is considered a mutually beneficial trade off, as the employee gets compensation for the injury without a lengthy and uncertain legal battle and the employer is protected from large damage awards that could potentially bankrupt them.
What Does Workers Compensation Cover?
Workers comp will typically cover any accidental workplace injury, and the employee will receive the payout no matter who is at fault. Although workers comp casts a fairly wide net when it comes to coverage, there are exceptions. In certain states drug or alcohol testing is mandatory, and if the employee is found to be under the influence their benefits can be denied. Benefits can also be denied if the employee self-inflicts the injury, they are not on the job at the time of the injury, or the injury results from a violation of company policy.
Workers comp payments help cover the cost of medical care and wage replacement for employees who are unable to work for long periods of time due to the injury. Although the wage replacement payments are modest and usually only amount to a fraction of the employee's average income, they are completely untaxed. Workers comp can also provide benefits for the loved ones of an employee who was killed on the job.
How Does Workers Compensation Benefit The Company?
Workers comp may seem like just another frustrating expense, but on the whole, it's a great thing for everyone in the company. As an employer, you are shielded from the litigious nature of the modern workplace. Long, drawn out legal battles are the last thing you want, and if the case doesn't end up going in your favor you could be looking at damages that are enough to render your company insolvent.
Your employees will appreciate it as well. Knowing that they are covered in the case of an accidental workplace injury without having to resort to a lawsuit is very comforting, especially in workplaces where injuries are more common. At the end of the day, everyone wins with workers comp.
Workers compensation is a vital part of any liability and risk management plan. At Summerlin-Roberts we will work with you to implement a workers comp policy that protects you and your employees from workplace injury unnecessary litigation. Contact us today to find out more about our liability and risk management programs.