What is workers compensation insurance?

About workers compensation insurance

Workers compensation insurance protects both the company and its employees. Companies are responsible for maintaining a safe workplace, but accidents still happen. Almost every state requires that businesses with a minimum of three to five employees (it’s different for each state) have workers compensation insurance.

If an employee is hurt in the workplace or while working, even offsite, or becomes ill with a work-related sickness, workers compensation insurance provides the employee with costs for medical care and compensation for lost income; or death benefits to surviving family members. Workers compensation insurance pays the employee for these expenses, no matter who was at fault for the injury or illness.

The insurance is also set up to protect the company. If an employee sues the company as a result of a work-related injury or illness, the insurance policy pays for the medical expenses, wages, and any legal expenses that may occur. Workers compensation is the only insurance that automatically includes terrorism coverage. It covers injuries and deaths that occur in the workplace, or while working, that are caused by acts of terrorism.

A workers compensation insurance policy is separate from any other commercial business insurance and is not included in any package insurance policies.