What is Workers’ Compensation Insurance?
In most states, workers’ compensation is a no-fault system that provides wage replacement benefits and lifetime medical care for work-related injuries and illnesses. All for-profit employers and most not-for-profit employers must carry workers’ compensation insurance to cover all their employees.
Workers’ compensation insurance covers:
- Health care related to an employee’s injury
- Cash benefits of two-thirds of an employee’s average weekly wage, up to a maximum
- Travel expenses to and from health care appointments
Workers’ compensation insurance is paid for by the employer.
Benefits of Workers’ Compensation Insurance
For employees, workers’ compensation benefits can help cover
- Medical expenses for job-related sickness or injuries, including repetitive stress injuries like carpal tunnel or tendonitis
- Lost wages if they miss work while recovering from a work-related injury or illness
- Funeral costs if they lose their life in a work accident or from an illness caused by their work
- Ongoing medical treatment, like physical therapy
- Disability benefits if a work-related injury or illness causes a temporary or permanent disability and they can’t return to work
By covering employee illnesses and workplace injuries, workers’ compensation protects a business from lawsuits and keeps the business compliant with state regulations.