Employment Law 101: What is Workers Compensation Insurance and When Does it Apply?

The last thing anybody needs is to be involved in an accident in the workplace that leaves some type of lasting injury. Unfortunately, whether it’s taking a slip on a wet floor or a piece of machinery malfunctioning and leaving you hurt, workplace accidents are extremely common. In fact, as of the latest data, private industry employers alone reported over 2.6 million nonfatal workplace accidents. 

Experiencing such an accident in the workplace, especially when it isn’t your fault, is frustrating and can leave you wondering what your legal options are. On the other side of that coin, no employer wants to see their employees injured, let alone attempting to sue them for those injuries. This is why workers compensation insurance is legally required under employment law for the vast majority of businesses in the United States. Learn everything there is to know about this type of insurance and the protections it affords both employers and employees. 

The Basics of Workers Compensation Insurance

Understanding how workers comp insurance in Florida or any other state works starts with learning what workers compensation actually is. This form of insurance is provided to employees in the event that an injury or illness arises from or is caused by their work. The coverage is mandated by every state in the country, but the cutoff for when a business needs to start providing workplace compensation insurance can vary. Offering financial protection for medical expenses, lost wages, rehabilitation, and more, workers compensation is paid for by the employer, not the employee. 

Common Situations Where Workers Compensation Applies

Given that workers compensation refers to any accident or illness that occurs as the result of a person’s job, there are a wide variety of situations in which this insurance applies. However, some of the most common situations outlined in a workers compensation claim include:

  • Lacerations on the body resulting from working with machinery or tools without proper safety gear
  • Sprains, strains, or breaks resulting from improper lifting or accidental strain from moving materials
  • Intense bruising of the skin resulting from items falling on top of employees
  • Skin burns resulting from sunlight, radiation, electricity, and other means due to a lack of protective protocols
  • Eye injuries due to a lack of facial protection while working with dangerous chemical or irritants

All of the above are common examples of workers compensation claims, but they are just the tip of the iceberg. In fact, from a study conducted in 2020, the second most expensive workers compensation claim averaged $48,575 and was due to simple slip and fall accidents. To understand whether or not your specific incident is covered by workers compensation, refer to the materials you were provided at the joining of your firm. 

4 Primary Principles of Workers Compensation

While the basics of workers compensation do a good job of outlining what exactly the insurance is and when it applies, it can be a lot of information to remember. Below are four principles of workers compensation to keep in mind: 

1. Workers compensation covers injury or illness

The first principle of workers compensation is that it will cover the cost associated with an injury or illness that was received during the normal course of your job. This means that falling, getting pinned by machinery, or being exposed to chemicals are all examples that would be covered. It’s worth noting that not all injuries or illnesses are covered, such as an employee volunteering for an off-duty activity or self-inflicted wounds. 

2. Workers compensation covers lost wages and medical bills

Secondly, workers compensation will provide financial coverage for lost wages as a result of the injury or illness that a person suffered. This means that if they could not return to work for a period of time due to the injury, workers compensation will pay for that time. Additionally, future medical bills that stem directly from that same injury or illness may be covered under workers compensation.

3. Workers compensation may not be legally required in your state

While workers compensation is legally required for businesses in every state, there is a cutoff point for when a business needs to start offering it for employees. For smaller businesses in some states, it may be allowed to not use workers compensation. If you are an employee and are unsure whether your organization has workers compensation, look up the specific requirements for your state. 

4. Employees cannot sue their employer after accepting workers compensation 

Workers compensation is not just a benefit for the employee who is injured, rather it is also a benefit for the employer. In return for taking the financial compensation that comes with workers compensation, you are agreeing not to sue your employer for that specific incident. It’s important to be aware of this as it’s possible the injury you sustained was due to negligence on your employer’s behalf, in which case a personal injury lawsuit could be more applicable. 

Benefits of Workers Compensation

For most businesses, there is no choice about whether or not to offer workers compensation. However, understanding some of the benefits can make the cost more bearable:

  • Employees can receive financial compensation for just about any injury they may suffer
  • Employers are shielded from potential lawsuits that may come from those injuries
  • Employees can often receive coverage for lost wages and other long-term expenses resulting from the accident
  • Workers compensation has a wide range, meaning benefits for additional factors such as temporary or permanent disability may also be covered 
  • Workers compensation will also pay for an employee to gain new education if they are unable to return to their original role due to the injury

The Bottom Line

In an ideal world, workplace accidents would never occur in the first place. Sadly, they are extremely common due to a variety of factors ranging from poor employee training to the purely uncontrollable. As an employee, it’s important to understand workers compensation so that you know what you can file a claim for, but employers should also understand workers compensation to learn how they are legally protected when an accident occurs.

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