Most states require employers to maintain workers’ compensation insurance. The Workers’ Compensation Act, established in the early 1900’s, protects both employers and employees from workplace accidents. It requires all employers to make sure that funds are allocated for an insurance policy or reserve fund for workplace injuries. Workers’ compensation plans assure employees that if they are injured on the job, they will not suffer the losses such an event can cause. Employees are also relieved of having to defend their actions or find fault with others to make sure they receive medical care for workplace injuries. Workers’ compensation is a no-fault system that assures medical treatment and supplemental wages are available to injured workers.
Your business can better manage profits margins if you do not have to generally reserve or spend limited resources to defend against fault allegations related to injured workers’ claims. Workers’ compensation insurance protects all parties involved. It also provides for an “exclusive remedy” which means that the system contains legally mandated provisions on everything the employee and employer need to control all situations related to the injury.
Federal law forbids employers from discouraging, harassing, or intimidating employees who bring claims. This means that employers can be required to pay money damages if they engage in overt acts such as demotions or terminations because a worker makes use of the workers’ compensation insurance coverage. !
Workers’ Compensation insurance can be a serious business expense. However, operating without the proper insurance protection can prove to be much more costly. Through the workers’ compensation system, employers and employees mutually benefit.