Workers Compensation Insurance
Workers' compensation is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment in exchange for mandatory relinquishment of the employee's right to sue his or her employer for the tort of negligence. The tradeoff between assured, limited coverage and lack of recourse outside the worker compensation system is known as "the compensation bargain".
While plans differ among jurisdictions, provision can be made for weekly payments in place of wages (functioning in this case as a form of disability insurance), compensation for economic loss (past and future), reimbursement or payment of medical and like expenses (functioning in this case as a form of health insurance), and benefits payable to the dependents of workers killed during employment (functioning in this case as a form of life insurance).
General damages for pain and suffering, and punitive damages for employer negligence, are generally not available in workers' compensation plans, and negligence is generally not an issue in the case.
What Does Workers' Compensation Insurance Buy?
When purchasing workers' compensation insurance, an employer is buying the following protections:
- Medical services needed to treat the job injury or illness
- Temporary disability payments to the employee to help replace lost wages
- Permanent disability payments to the employee to compensate for permanent effects of the injury
- A death benefit for the employee's survivors in the event of a fatal injury
- Legal representation for the employer by the insurance carrier
- Protection for the employer against most lawsuits for on-the-job injuries/illnesses
The employer must pay for the cost of insurance coverage; it is illegal to require employees to pay any of the costs associated with workers' compensation premiums or injuries.
Contact Atlantic Agency to speak to a licensed broker to help you obtain a workers compensation policy for your company.