Workers Compensation Insurance Covers

Find out what Workers Compensation Insurance is all about.

It is important for businesses and employers to give fair compensation to their workers. Some nature of jobs require physical strength which also invites bodily injuries and health concerns. To compensate for this loss, many business owners proceed to an insurance company to have all these health measures checked: to get their employees insured under the worker’s compensation belt.

A worker’s insurance compensation in the USA is typically referred to as work comp cover is basically protection given to employees if they get injured or sick because of their job. Whatever the legal requirement and laws may be in your country, keeping those in mind the work comp covers employee sickness and health if it has been affected due to the nature of the work.

Naturally employees won’t be covered if they are injured or sick because of their own negligence such as alcohol consumption or drug intoxication. Moreover employee misconduct is also often not covered in this type of insurance, where an employee would knowingly violate the law or the policy.

Workers Compensation Insurance covers:

  • Employee death: If an employee dies while on duty or their cause of death is the job, then the beneficiaries will receive monetary compensation under the insurance. This will also cover any funeral or burial costs.
  • Injuries: Any injuries caused by the job are covered. Let’s say an employee is working in the copy room and is required to pull down files from the top cabinet. While doing so if he falls down the ladder and fractures his leg, he will be covered for the ambulance ride, treatment and required medications.
  • Sickness: If the employee gets sick while on the job, let’s say the basement of the company is dusty and the employee is asthmatic. This has caused him an allergy because of the dust- the insurance will cover medicines till he gets better.
  • Employee disability: An electrician while fixing the AC unit has it fall on himself, in turn has a shoulder displacement and is disabled for a while, his medicines and any treatment will be covered under the insurance.
  • Missed wage replacement: Bringing forward the same example of an electrician, when he is disabled and can’t physically come to the job and work, the wages missed for weeks or even months will be covered by the insurance company. Because the work was missed due to work-related mishap, the employee will receive that certain amount of wage he would have otherwise earned.
  • Additional medical benefits in hospitals: Under the insurance, employees are also covered for additional benefits in the hospital like follow-up treatments and routine checkups. Please note that these are only liable if the illness/injury has happened at work.

Worker’s Compensation Insurance DOES NOT cover these people:

  • Businessmen
  • Business owners
  • Longshoremen
  • Volunteers
  • Independent contractors
  • Federal employees
  • Railroad employees

Workers Compensation Insurance Small Business

One very important question that employers often ask is whether their small business requires employees to be insured by State?

Well, if your firm has more than three employees, you are liable to compensate them. If you have more than three full-time or part-time employees, you are legally required to provide them with compensation coverage.

Workers Compensation Insurance for Nanny

Even though your house is a safe space, employees working at your house can still be injured. A nanny or caretaker can get sick or injured while watching the house, your kids or even your pets. In many states, if such an incident happens and your nanny isn’t insured, YOU could be liable to hundreds of dollars in treatment ordered by law.

Now that you’re a household employer, the nanny that works for the house is now your employee. So she must also be protected and given coverage of worker’s comp through a commercial or a licensed insurance broker.

Workers Compensation Insurance Rates

This mathematical section of the article is actually very important for you to get an idea of what an average worker’s compensation rate looks like as per the nature and risk involved in the business.

The average cost of a worker’s compensation is around $40,000 with an average premium of $47 a month.

Here is a list of industries and the average premiums they have to pay annually.

Industry Average Premium Per Year
Administration & Facilities Support Services $327
Agriculture, Forestry & Fishing $1858
Arts, Entertainment & Recreation $1436
Construction & Trade Contractors $5331
Educational Services $1322
Finance & Insurance $1436
Healthcare & Social Services $1009
Hotels or motels $2058
Management of Companies & Enterprises $2400
Manufacturing & Food Production $2214
Underground Mining $7312
Personal Services & Miscellaneous Organizations $383
Professional & Technical Services $1833
Public Service & Public Administration $445
Real Estate $332
Restaurants and Taverns $818
Retail Trade $1013
Telecommunications & Information $1598
Transportation & Warehousing $4290
Utilities & Sanitation Services $1004
Wholesale Trade $2338

Note: Sample rates have been extracted online, courtesy of WorkCompLab.

As you can see in the table above, high risk businesses such as construction companies, warehousing, underground mining are the jobs with the highest amount of annual premiums because of the high risk of injuries or death involved.

Industries such as administration jobs and real estate have the lowest premiums because of low risk involved, as these jobs require desk work.

Workers Compensation Insurance Verification

If you want to verify whether you have been insured, you can do so by online methods. You can simply visit the Workers Compensation Coverage Verification OR call on the helpline number at 605.773. 3681.

It is important for your own peace of mind to check whether you are insured, because this way you will perform well at work knowing that any unfortunate mishaps will be financially covered.

As an employer, it is important for you- legally and financially- to have your employees covered under the worker’s insurance policy because any accidents could otherwise cost you hundreds of dollars.

It is very common for employees to be encircled with work-related sickness or injuries, especially in high-risk jobs and industries. Therefore as an employer it is your duty to not only make the work environment safe and secure for your employees but ALSO provide them with proper work comp coverage.

Nabeel Ahmad

Nabeel Ahmad

Nabeel Ahmad is the founder and editor-in-chief of Insurance Noon. Apart from Insurance Noon, he is a serial entrepreneur, and has founded multiple successful companies in different industries.

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