10 Things You Should Know About Workers’ Compensation Coverage

Being a business owner, you must already be aware of the importance of different insurance types, some of which may be mandatory in your state. In difficult times, a successful business is not only defined by its revenue but also the measures it takes to provide for its employees. 

Worker’s compensation is one such benefit that all employers should understand in detail, especially in situations when employees may suffer from ailments or injuries in their workplaces. 

How worker’s compensation benefits small business owners

Small business owners are always looking to mitigate the risks associated with business operations and employees’ safety, and workers’ compensation insurance helps them provide some much-needed assurance to their employees. Focused on workplace-related illnesses to accidental injuries and addressing necessary medical care along with wage replacement, this cover helps to recoup losses, regardless of the cause of the incident. 

To know more about the criteria, benefits, and the rights of your employees concerning workplace injuries and ailments, look at the ten key points mentioned here:

Workers’ compensation primer is a state-regulated program

When it comes to workers’ compensation benefits, the rules in each state vary. You should abide by the statutes of your state regarding the type of ailments and injuries that are covered in the benefits, as well as the ways these issues need to be dealt with. The regulations may also vary based on the medical care that should be provided to the workers and the amount of benefit they should be entitled to. 

The insurance is mandatory in some states

If you run a small business, you should check whether your state mandates the need for workers’ compensation benefits. Noncompliance may not only cost you hefty fines but also make you pay the benefits from your pockets. 

Not every employer is mandated to buy workers’ insurance

Although many states mandate the need for purchasing workers’ compensation insurance, some small business owners may be exempted from the rule. For example, in certain states if you have an LLC with no employees then you may not be required to carry workers compensation.  

Whether you should have stable workers’ compensation policy mainly depends on the type of business, number of employees and the type of work involved. You can refer to the US Department of Labor’s list to know if you’re required to provide the coverage to your employees. Again, for a sole proprietor, the worker’s compensation policy may be optional, depending on the state s/he hails from. 

Private organizations may provide workers’ compensation depending on state policies

The state decides whether private organizations are eligible to provide workers’ compensation programs. If they are, you should opt for a reputed, responsive, and reliable insurer to buy the most beneficial coverage for your employees and gain their trust in the process. Fill the insurer in on any specific type of coverage you need and look for the best rates. 

Medical, wage-loss, and death benefits are included in most of the policies

If a worker suffers from an accidental injury in the workplace, s/he can avail of the benefits of workers’ compensation including the medical bills and subsequent wage loss during the recovery period. The wage-loss benefits generally cover two-thirds or half of the weekly wages of an employee. If an unfortunate worker loses his/her life due to an accident in the workplace, his/her immediate family members can file for the compensation. 

Independent contractors are generally not considered covered employees

Who is eligible to file a compensation claim is already defined by the law. Any worker, who is not a full-time or part-time employee of your organization but an independent contractor, is often not eligible to file for the claim, or his/her claim won’t get approved but that decision will ultimately depend on the Department of Labor who will make the final determination, it is best to consult with a legal professional for an opinion based on your particular circumstances.

Workers’ compensation only covers occupational injuries

Self-inflicted injuries or ailments caused by drug abuse or similar conditions are not covered in the workers’ compensation benefits. Only if the employee suffers from an ailment owing to his/her work conditions, or an accidental injury at the workplace, his/her claim will be approved. 

There’s no limit to the amount of money paid to the covered employee

It’s the Worker’s Compensation Board in every state that determines the amount of money that should be paid to an injured or ailing worker. It depends on the employee’s salary as well as the severity of his/her condition. However, the employer liability coverage does have a limit in such cases. It often ranges somewhere between $100,000 and $500,000 for physical injuries for any employee. 

Only 1%-2% of workers’ compensation claims turn out to be false

According to a report by Frontline, only a tiny percentage of workers’ compensation claims have turned out to be false and designed to extort money from employers. However, it’s important to be alert and stay in touch with the injured employee throughout the recovery phase to understand if his/her claims are true. 

Remote injuries are valid in the case of workers’ compensation benefits

The employees need not be physically present at their workplaces during the time of the injury or ailment. For example, if an employee is working remotely or running errands on behalf of the company, s/he is eligible to file for compensation if s/he falls sick or suffers from an injury that could be said to be work-related. 


As a responsible employer, it’s your job to see that your employee’s valid claims are approved as soon as possible. Hence, you should talk to a trusted insurance provider about the best possible benefits you can provide your employees with. This will not only increase their faith in you but also motivate them to work harder, as long as they know that you have their back. Worker’s compensation insurance can have that impact.