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Workers' Compensation Insurance: Who Needs It?

Most states require employers to have workers' compensation insurance in place. But even if your state does not require it, you may want to consider this valuable coverage to help protect both your employees and your practice.

Workers’ comp coverage pays benefits to workers who are injured or suffer an illness as a result of their job. This includes payment for:

  • Medical care
  • Lost wages
  • Permanent or partial disability
  • Death benefits to dependents

Even in a state where workers' compensation coverage is not required, if an employee is injured while at work and you don’t have workers’ compensation insurance, you may be held responsible for paying costs associated with the injury, illness or even the death of the employee. (In fact, in that case, some health insurance companies may deny payment of the claim.)

However, having a workers’ compensation insurance policy in place can provide the necessary coverage to help cover expenses related to the employee's injury or illness. With rising medical costs, the possibility of lost time away from work and possible disability, a workers’ comp policy may make good business sense.

When Is It a Workers’ Comp Claim?

In order for a claim to be valid under a workers’ comp policy, it must meet these five requirements:

  1. Happen to one of your employees – This does not include an independent contractor or vendor.
  2. Result in an injury or illness – It must be tied directly to the job and includes accidents, workplace violence, acts of terrorism and natural disasters.
  3. Arise out of employment – There must be a direct connection between the injury and the business. If the employer benefits in some way (monetarily or otherwise) from the employee’s activity at the time of injury, then the claim meets this qualification.
  4. Occur in the course and scope of employment – This may be at the actual work site or off site if the employee is performing duties related to work (going to the post office, calling on clients, etc.).
  5. Result in impairment and/or lost wages – The injury or illness must cause the employee to be impaired in some way so that he or she is unable to perform tasks completely and has lost time away from work due to the injury or illness.

NCMIC Insurance Services can help you learn more about workers’ compensation insurance. Contact an agent today at 1-800-769-2000, ext. 8180.

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