Determining the Need For Workers Compensation Insurance

It is common that, if an employee is injured or died in the course of his employment, then they or their families or dependents are often entitled to collect worker’s compensation benefits. Thus, it is a type of employer-paid insurance that provides medical and indemnity benefits for work related injuries and diseases as well as financially support the employees while they are recovering.

Earlier, it was treated as the employee benefit, but later, it is legally mandated as right of the worker. Employers who are legally required to have workers compensation insurance but fail to purchase it and do not qualify as “self-insured by law” usually can be sued through the system of court. In case, if the employer was found to be negligent, and if that negligence directly caused a worker’s injury, the employer would be liable for the injuries. However, there might be extra penalties on uninsured employers.

Workers Compensation insurance is a social insurance system, falling under the state regulations that gives partial wage or missed salary replacement for temporary or permanent loss of earnings for job-related injuries and illnesses. Each state has different requirements, but generally any business that has full or part time employees must carry workers compensation insurance to cover these employees.

The cost of the workers compensation insurance is based on rates per 100 of payroll and depend on the job classification of the employee. Basically, the cost for an employer depends on the specific employers loss history, premium size and type of work, that is devised throughout the years.