What is Workman’s Comp

Workman’s Compensation is an insurance protection plan that shields organizations and their representatives when one of their employees is harmed or contracts a disease at work. A worker’s compensation policy will pay for the expenses of a debilitated or harmed worker’s lost wages and medical costs. Apart from the cost of lost wages and medical costs, these plans also cover the expenses of various things, such as physical therapy, mileage, and medically necessary devices. When an employee passes away on the job, benefits are paid to beneficiaries or family members of the deceased worker and can cover burial costs.

The current framework for Worker’s Compensation payouts and policies came about in the mid-1890s during the “muckrakers” literary movement. The stories exposed by this movement ousted employers with dangerous working environments and brought to light the need for this type of insurance to be implemented.

As it stands today, workman’s comp shields employees from potentially high costs that relate to on the job injuries and ailments. In addition, these policies shield business owners from the high costs of paying claims out of pocket or facing a potential lawsuit.

Who Needs to Carry Workman’s Comp Insurance?

Almost all states stipulate that businesses who employ staff carry workman’s compensation. While variations of the requirements shift from state to state, in nearly every state, you will be required to cover all workers on your policy.

Aside from being a legal obligation to carry a policy for worker’s compensation in nearly every state, failing to do so can be a huge burden on your business’s bottom line if you have to pay for a claim out of pocket. Budgeting for insurance gives you the ability to preplan for unfortunate events and can save you from huge losses.

How Does Workman’s Comp Function?

When a claim is filed under worker’s compensation, the policy insurer pays for medical and indemnity costs the employee may accrue. Indemnity costs cover the loss of wages while the employee is unable to return to work and expand beyond paying for typical medical care.

When an employee is injured, they will need to report the injury to the business right away. Then the employer will file a claim and send the employee to obtain medical treatment. Once the claim is filed it will be reviewed for approval or denial. In nearly all cases the claim will be approved, and payment will begin for medical costs and costs to cover loss of wages.

In some states, additional follow up will be required for the remainder of the claim process. This may mean additional medical care and evaluation, or in some cases additional forms. Make sure you follow through all of the steps and follow the instructions of your insurance company to ensure claims are processed and paid in a timely and appropriate manner.

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