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Quick Guide to Workers Compensation

If an employee is injured or disabled on the job, their employer is required, by law, to financially compensate them. Such payments to the employee are specifically exempt from taxation. All companies must have this type of business insurance, which provides medical coverage and income replacement. Workers’ compensation also helps prevents employers from being sued for the specific condition of the workplace that caused the injury or illness.

All states require businesses to pay for the medical treatment or lost wages that are caused by an injury or illness that happens at work. Businesses can either purchase their workers’ compensation policy directly from the state, or from a private insurance company. The cost of workers’ compensation coverage is usually one of the highest operating expenses that businesses have to pay.

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