When you’re on the clock at your job, your main focus should be on doing your best to complete each task and, hopefully, even getting some enjoyment out of your work. Whatever your chosen profession may be, worrying about staying safe and avoiding workplace injuries (whether for yourself or for your employees) should be the furthest thing from your mind. Unfortunately, this is not always reality. To ensure you will be covered in the event of an on-the-job incident that may result in physical pain and suffering, it is wisest to have workers’ compensation insurance in place. If you’re wondering about workers’ compensation insurance in Pennsylvania and how it works, read on as we break it down to the basics.
Basically, workers’ compensation insurance coverage provides benefits to those who are injured or who become ill while at work. The technical term that is used is “in the course and scope” of the job. The benefits provided include wage and medical payments. This means that if your claim is covered, you could still receive missed wages while recuperating or receiving medical care. Also, your coverage could take care of those medical expenses incurred due to the workplace injury or other workplace-induced illness. Like many types of insurance policies, coverage varies by state in terms of wage and medical benefits. This means that coverage that may be available in one state may not be available in another state, or if it is, the key aspects of that coverage may be slightly different.
Wherever you are located, it is smart to brush up on your particular state’s mandated policies. It is a best business practice for companies to purchase and maintain workers’ compensation insurance for their employees, because in most cases, it provides protection for the business owner against many types of lawsuits that could be brought about by injured or sick employees. Workers’ compensation insurance is actually considered a “social insurance.” Why is this? Because it relies on a social contract between employer and employee. In terms of coverage limitations, like all insurance policies, workers’ compensation insurance has its limits. It is not as simple as purchasing the insurance and being automatically 100% covered in any situation. There are limits and exclusions, and each case has to be evaluated and go through the proper process in order to receive the benefits. Overall, the way it works is that workers’ compensation insurance is purchased by a business owner, and depending on the state, the insurance is either underwritten by insurance companies or publicly-supported state funding.
Technically, both employee and employer benefit. Depending on the severity of the injury or illness, having the coverage in place can protect the business from suffering some pretty major financial losses. The employee can be given treatment and rehabilitation, if needed, as well as not having to worry about lost wages while off the job. No one wants to suffer an illness or injury as such in the first place, so when the unfortunate incident occurs, at least there can be a buffer in place to protect both parties as much as possible. The most severe or extreme cases can provide financial benefits to the family of those who are killed on the job, or in a job-related accident.
A few of the most commonly reported workplace injuries or accidents that occur include the following:
When an injury or accident happens, the employee and/or the employer reports the incident by filing a claim. The insurance company then begins the investigation process in order to obtain as much information as possible relating to the incident by gathering all of the facts. The extent of the injury must be determined, and all medical expenses (if applicable) must be calculated and reviewed. The insurance company has to determine if the place of business/the employer was at fault in order to conclude whether or not they are liable for paying out any benefits.
Although, as we have mentioned previously, workers’ compensation insurance costs vary by state, a commonality is that different types of businesses are organized into categories called “classes” as part of the insurance coverage costs. An array of factors get plugged in to calculating the cost, including patterns or reports of claims over a five-year period (known as “loss costs,” and potential risk factors associated with companies in different classes. Economic factors relating to each state are part of the equation as well, as economic conditions are not uniform from state-to-state. Once claims are approved and processed, the injured party receives the funds and returns to work at an agreed upon later date.
All states across the country, to some degree, require business owners who have employees other than themselves to purchase and maintain workers’ compensation insurance coverage for their employees. So, in addition to being required by law, it’s also just smart business to keep your assets protected by having this type of insurance coverage in place. What about employers who do not have this coverage for their employees, despite it being required by law in most areas? In the event of a workers’ compensation claim, uninsured businesses or business owners can be subjected to paying large fines and/or being responsible for paying damages out-of-pocket. Imprisonment is even a possibility. In the grand scheme of things, it really isn’t worth risking these severe repercussions in order to skimp out on providing workers’ compensation insurance coverage to your employees.
To learn more about workers’ compensation insurance coverage in the Pennsylvania area, log on to https://alchemyinsurance.com/ and get a free quote today. Alchemy Insurance Agency specializes in connecting businesses and individuals with the insurance coverage provider that meets all of their needs.