Workers' Compensation

If a business has full- or part-time employees, it will probably have to purchase a workers’ compensation insurance policy. This type of insurance coverage is required by law. Shopping around for good business insurance quotes can save you money while you purchase this very important type of insurance.

Workers’ compensation is a kind of disability insurance that provides income to workers who are disabled by an injury on the job and unable to work.

Unlike most disability insurance policies, workers’ compensation only pays claims to those whose disabilities are directly caused by an injury related to their work. Persons injured off the job or disabled by an illness are not able to collect workers’ compensation. Business insurance companies need to be very knowledgeable in this area of insurance in order to write policies that give sufficient coverage to both the employer and the employee.

Protection from Lawsuits
A business needs to provide workers’ compensation insurance to protect it from lawsuits. This means that it is also a kind of liability insurance that covers claims not covered by other policies that your business insurance company has written for you.

Most states in the United States have laws that require employers to compensate workers injured on the job and unable to work. Workers have the right to sue employers if they are unable to work because of a job-related injury. Workers’ comp is designed to cover these claims and prevent such lawsuits.

Not Provided by the State
Despite what some people think, Workers' compensation is usually not provided by the government. The unemployment insurance provided by state governments does not cover workers who have been disabled by on-the-job injuries.

In most cases, a business with employees will probably have to purchase its own workers’ compensation policy. This policy will only cover workers when they are on the job.

Workers’ Comp and Disability Insurance
Many businesses also provide their workers with a separate disability insurance policy. A disability policy is a kind of fringe benefit that reimburses workers if they are unable to work because of an injury or illness that is not related to the job. Check your business insurance quote carefully to see exactly what type of coverage you are being offered.

Unlike workers’ compensation, disability insurance is not required by law. In most cases, the disability insurance policy is separate from the workers’ compensation policy.

Could Be Required by the State
Many states, including California, have laws that require businesses or businesses with a certain number of workers to purchase workers’ compensation insurance for employees.

It is always a good idea for a business owner to check with the state government or his or her insurance agent to see if workers’ comp is required. Employing a person without workers’ compensation insurance could be illegal. Business insurance companies should be very familiar with the laws of your state and can give you appropriate coverage.