Getting hurt while on the job is not a situation anyone wants to consider, but it happens more often than you might think. More than 4.5 million people experience an injury at work each year.¹
Workers’ comp can help you cover medical bills and lost wages if you or an employee experience a workplace injury. Here are some of the most common questions people ask us.
Worker’s compensation is for work-related injuries or illness. If your company is temporarily out of business because and you can’t pay your employees, that falls under business interruption coverage.
Business interruption is a type of property insurance that covers the loss of income that a business suffers after an unexpected event, such as a fire or snow storm. For example, if a wind storm hits your city and a tree falls on your shop, business interruption insurance will help cover lost income.
Workers’ compensation insurance protects employees and business owners from financial losses after a workplace injury or illness. A successful claim can reimburse medical bills, rehabilitation costs, lost wages and other expenses.
In many cases, a workers’ comp policy will not provide coverage if an employee experiences a coronavirus infection. However, those who can confirm they were infected at their workplace, could be eligible for coverage.
Since business interruption coverage is not included in workers’ compensation, any loss of income related to the coronavirus is not covered.
Each state has unique laws for what a workers’ comp policy covers, so it’s important to review your specific policy and how it applies to where you and your employees work. We review workers’ comp claims on a case-by-case basis.
Workers’ compensation generally does not cover subcontractors because they’re independent of your business — that is, they are not your employees.
However, if you regularly work with subcontractors, you’re still responsible for checking that they have their own workers’ comp and for keeping those certificates on file. If your subcontractors don’t have this you need to report what you pay them on your payroll.
Workers’ compensation is heavily regulated by each state, and many states have subtle differences in the requirements. It’s important to carefully read your policy documents.
Injuries to business owners can only be covered by the business owners’ coverage in workers comp. If you’re the owner of the company and you trip and break your hand at your work site, you could be eligible to get help with your medical bills and lost wages.
Personal health insurance might not cover medical fees for work-related injuries — especially if you’re in the construction industry — so getting workers’ comp for yourself as a business owner offers you an extra layer of protection.
Every state except for Texas requires workers’ comp for employees. However, each state also typically has a short list for who is exempt from having coverage. It’s important to check the insurance requirements where you work.
Independent contractors are often exempt from workers’ compensation requirements laws, as well as sole proprietors, partners or LLC members. But It’s common for people in these roles to still purchase insurance so they can get help with their medical expenses and lost wages.
Some states don’t make it a requirement for certain types of workers to have workers’ comp, such as:
Be sure to check the exemptions in your state before you decide to buy workers’ compensation insurance or not.
If you’re a business owner without any employees, your are probably not required by law to have workers’ compensation, particularly if you’re a sole proprietor, partner or LLC member. However, that might not be the case for more regulated industries, such as construction.
Even if it’s not legally required, you could still be asked by your clients for proof of insurance. Having a certificate of insurance for workers’ comp lets clients know you have coverage if you get injured while working for them.
If you’re a sole proprietor or independent contractor without any employees, you usually aren’t required by law to get workers’ comp. However, the construction industry is often regulated differently and you might be required to have coverage before you take any jobs.
Regardless if it’s required by law, it can be a good idea to have an active workers’ comp policy. If you get sick or injured on the job, workers’ comp would help cover medical bills and some of your lost wages.
If you’re a sole proprietor or independent contractor with employees, you’ll probably need to get workers’ compensation for them unless you work in Texas.
Learn more about workers’ compensation for contractors.
Workers’ compensation only provides financial help for injuries that happen at work. Disability insurance covers injuries that happen outside of work and is divided into short-term and long-term disability.
It is the employer’s responsibility to pay for workers’ compensation insurance, and it’s usually required by law. Disability insurance is typically optional and costs are often shared between the employer and employee.
Learn more about the differences between workers’ compensation and disability insurance.
Workers’ comp benefits are separate and distinct from state disability benefits. If a work injury results in a permanent injury that renders you unable to return to work, workers’ comp may pay some kind of permanent injury benefits, but it varies from state to state.
You’ll need a workers’ compensation doctor to verify that your disability was caused by your work conditions, and that your disability is not going to improve. This is called “maximum medical improvement,” or MMI.
If you hurt your lower back from lifting too many heavy boxes at your moving company and can’t work anymore, a doctor will rate your disability (stated as a percentage) and determine the degree of permanent limitation.
Permanent total disability means you can’t return to work at all in any field. Permanent partial disability refers to a lasting impairment that sticks around after the initial injury or illness, such as hearing loss. These types of cases are the most common workers’ comp cases.
Workers’ compensation covers medical expenses and some lost wages after an accident at the workplace. Health insurance covers personal injuries and ailments that happen outside of work.
Say you trip getting out of your van while working with an employee to deliver a sofa and break your leg — that would be covered by workers’ comp if you have owner’s coverage with your policy. But if you’re bringing a sofa to your buddy’s house on the weekend and break your arm, you would need health insurance to cover those costs.
Health insurance will cover a lot of your medical expenses, but it won’t cover any lost wages while you’re recovering after a workplace injury.
Learn more about the differences between workers’ comp and health insurance.
Workers’ compensation exemptions vary from state to state, so make sure you review the rules in your state before making your decision.
Learn more about workers’ comp insurance laws and requirements in the following states: