Worker’s Compensation Insurance: How It Benefits the Employee and Employer

If you have a business with employees, Worker’s Compensation Insurance is required to cover them in the case of a work-related illness or injury. Though state laws differ on specific requirements and rates/coverage differ based the insurer, worker’s comp policies offer the same basic protections for employees and employers in every jurisdiction.

How Worker’s Compensation Protects the Employee

Worker’s comp insurance provides employees the necessary protection for any accidents, injuries, and/or sicknesses that are developed on the job. However, the coverage is more comprehensive than just incidents that occur in the employer’s place of business. Employees are protected no matter where they are, as long as they are engaged in an activity that is related to the business.

For example, if you are a frequent business traveler, worker’s comp would cover you for any incident while traveling, regardless of whether or not the activity was directly related to the business. This would include auto accidents, injuries that occurred at the hotel you were staying at and other such occurrences. Company social functions such as holiday parties are also covered.

Perhaps the most beneficial aspect of worker’s compensation insurance from the employee’s perspective is that it is “no fault” insurance. In other words, if the employee suffers a work-related illness or injury, he/she is eligible for benefits regardless of who is at fault. This gives employees far greater security knowing that if they are injured on the job, they will not need to hire an attorney to prove that the employer was at fault to receive benefits.

How Worker’s Compensation Protects the Employer

Employers sometimes complain about the requirement to offer worker’s comp coverage because of the no-fault aspect and the potential for fraud. However, this insurance also offers business owners one very large benefit; protection from lawsuits by employees that have become ill or injured at work. Employees who collect worker’s compensation benefits forfeit their right to pursue litigation against the employer. This “compromise” helps keep premiums lower by keeping the majority of on-the-job injury/illness cases out of court.

Worker’s compensation is necessary for any business with employees and overall it is a fair system that gives both employees and employers the protection needed to keep the business running smoothly. Choosing the right workman’s comp policy for your business depends on the state and industry you are in. The best place to start is by speaking with a Maryland independent insurance agent with access to several of the top carriers in your area. Independent agencies are typically able to locate the policy that best suits your needs and budget.