What is Workers' Compensation Insurance?
Workers' compensation insurance is legally required coverage that provides benefits to any worker who becomes ill or injured on the job. While there are specific eligibility requirements for employees and exceptions to federal and provincial regulations, this insurance coverage pays for the medical costs associated with the illness or injury, as well as a portion of lost wages while the employee is unable to work. This coverage applies in qualifying situations regardless of who is at fault. This means coverage applies whether a customer, employee, co-worker, or employer caused the incident.
Workers’ Compensation Insurance does not protect employers from claims involving wrongful acts that arise from stages of the employment process, including sexual harassment, discrimination, retaliation, wrongful dismissal, invasion of privacy, negligent evaluation, denial of career advancement, and many others. For coverage for these types of claims, an employer must secure Employment Practices Liability Insurance (EPLI).
Synonyms for Workers' Compensation Insurance
When referring to workers' compensation insurance, you may commonly see the following term used interchangeably. It has a more general meaning, though it is assumed that the coverage deals with employee injuries.
- Compensation Insurance: This refers to the medical or wage benefits paid to those who are injured or become ill in relation to their job duties. It is used as protection against civil lawsuits from injured employees seeking compensation for their losses.
Learn More About Workers' Compensation Insurance
When do I need to be aware of workers' compensation insurance?
An illness or injury to an employee who was on the job at the time of the occurrence can trigger a workers' compensation claim. The insurance policy pays out the expenses associated with treatment or rehabilitation, as well as disability benefits or death benefits to families if the employee is killed. Coverage requirements are determined by the province or territory, as well as by accepted insurers.
What is important to know about workers' compensation insurance?
Slips, falls, strains, or machinery incidents are common injuries filed under these plans. Rates are determined by a number of factors, though workplace injuries and the loss rating for a business are two primary influences.
- Failing to provide coverage with limits required by the province or territory can lead to fines, possible imprisonment, business closure, and paying claims out of pocket.
- Claims must be approved before employees receive compensation or financial assistance.
- Not all companies are required to carry workers' compensation coverage, nor are all employees eligible for enrolment.
- In Texas, private employers may choose to carry workers’ compensation insurance, but it is not required.
- Stop-gap coverage, which protects an employer if an employee sues for amounts beyond what workers’ compensation covers, is required in monopolistic jurisdictions that do not offer employment practices liability insurance (EPLI), which are currently the four states of North Dakota, Ohio, Washington and Wyoming.
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