What Is Workers’ Compensation, and How Do I Apply for It?

Worker’s compensation is an insurance policy that provides medical care and benefits to any employee who experiences an injury or illness as a direct result of their employment. It pays an employee’s medical expenditures and a percentage of their wages, among other things.

Its “no-fault” aspect is a mutual agreement between employee and employer in which the company agrees to pay, and the employee usually cannot sue for damages.

How Does Workers’ Compensation Work?

Workers are compensated regardless of who caused the accident. Workers’ compensation also pays out death benefits to the person’s dependents if a worker is killed on the job. Workers’ compensation plans are paid in two ways: 

  • Through an annual audit, employers can pay for workers’ compensation. This is the most commonly used payment method. An audit is completed annually by an insurance firm that estimates the total payroll.
  • Pay-As-You-Go (PAYG) workers’ compensation is another alternative. Employers are given the option to pay their premiums after each payroll. In contrast to the first option, PAYG will be the total amount of employees’ compensation rather than an estimate.

The overall framework of the workers’ compensation system varies significantly between states. The primary distinctions are the rates given to injured employees and the company rules that employees and insurance firms must follow.

How Do You Apply for Workers’ Compensation?

The procedures for filing for workers’ compensation differ by state. In general, a worker who has been injured or becomes unwell in the workplace should:

  • Describe the injuries or illness in full, including images and the names of witnesses if feasible.
  • Notify your employer of the injury or illness. The employer should handle everything else, including filing your claim with the insurer.

You can follow up with the employer’s insurance carrier to ensure a claim was lodged. If your claim is refused, you have the right to file an appeal with your state’s workers’ compensation board. 

Who Is Exempted from Workers’ Compensation?

Workers’ compensation is often available solely to paid employees, not contractors or freelancers.

In certain states, they are based on variables such as how many hours an employee works, how much money they make, how many employees a business recruits, and the specific type of work they do.

If you have any worries, study the fine language and consult a trusted professional, such as an experienced agent or broker.

The Bottom Line

Employers are required by law to take reasonable precautions to ensure the safety of their workplaces.  Accidents do, however, occur. When they do, worker’s compensation insurance protects them. Except for Texas, every state requires companies to provide workers’ compensation insurance to at least part of their employees. Contractors and freelancers are rarely protected, and several states exclude or limit the extent of the benefits.

Need a Workers’ Comp Insurance? Isu Wissink Can Help!

Do you have your doubts about your workers’ comp coverage?  Feel free to reach out to our team at ISU Wissink to learn more about how workers’ compensation insurance. Our insurance agents can also help in creating a new customized insurance policy for all your needs.