Workers compensation insurance protects the employees from fatal mishaps on the job through medical benefits and wage replacement. There are various plans for different jurisdictions. These include payments to compensate for wages, economic loss, medical expenses and death on the job. However, no compensation is providing for general pain and injuries due to employee negligence. The limits and time duration of the benefits vary as per the jurisdiction. Nevertheless, three classes of benefits are provided by most of the states. These benefits include:
- Medical related benefits: These benefits support the employees by taking care of all the bills of service. Usually, they are unlimited without any deduction. The employee only has to follow the doctor’s prescription. All the expenses are born by the insurance and relieve the employees from any hassles.
- Benefits pertaining to disability or indemnity: The severity of the injury is categorized as partial and total which can be temporary or permanent. The payment is based on the combination of these categories. They include the temporary partial, temporary total, permanent partial and permanent total.
- 3. Benefits related to death: These benefits are limited in nature and include funeral expenses and some benefit to dependents. Some states compensate for the remaining of surviving spouse’s life while some provide the benefits for a specific number of weeks. The benefits can be collected when two conditions are fulfilled. Firstly, death must occur within a specific number of weeks from on-job injury. Secondly, the request for benefit must also be made within a specified time.
Beneficiaries of workers compensation insurance
Usually, most of the employees in the organization are covered in this scheme. However, there are certain workers who are excluded. They include owners of the business, independent contractors, casual workers, volunteers, casual workers, employees of private homes, railroad employees, maritime employees and farmers, and farmhands. The list also includes federal government employees as they are already covered under the federal worker’s compensations insurance scheme. This business insurance scheme is also not applicable to organizations having fewer than 3 to 5 workers.
Importance of workers compensation insurance
- Legal binding: This business insurance scheme has been made mandatory by law in most of the countries. There is growing awareness to protect the interest of the employees. As a result, the laws in most of the countries are becoming more stringent.
- It is affordable: Through this business insurance scheme, the employees feel safe and confident. It also adds to the goodwill of the company giving it an employee-oriented image. The company must use safe methods of operations which would reduce the chances of an accident. As a result, the worker’s compensation insurance will come at a premium price.
- It protects the employees: Employees are the most valuable asset of the organization. Any mishap to an employee greatly affects the organization negatively. The worker’s compensation scheme helps the employees at the time of accidents which in turn hedges the organization as well.
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