The Basics of Workers Compensation Insurance – Facts to Keep In Mind

Workers compensation insurance is a type of disability insurance that all employers are required by law to have for each employee. The very first workers compensation insurance laws began to be passed around 1902, and by 1949 every state had a law covering workers compensation insurance. Although most people think of them as strictly protecting employees, the truth is that workers compensation insurance is actually just as beneficial to employers since it protects them from costly lawsuits related to on the job injuries. While you might assume that workers compensation insurance is nothing but a thorn in your side, the truth is that it helps more than you know. Here's a look at the basics of workers compensation insurance, including the basic function of it and some common features of policies.

Under the laws governing workers compensation insurance, employers get protected from on the job injuries no matter who is at fault. The workers compensation insurance will pay for medical bills and, depending upon coverage, may even pay for some lost wages during an absence from work. In exchange for this, employees aren't allowed to sue their employers for mental anguish or pain and suffering. While employers can dispute workers compensation insurance claims, the actual process is complex and is seldom done unless obvious workers compensation insurance fraud is occurring.

It's also important to note that many different issues will disqualify an employee from receiving help from workers compensation insurance. If the employee was injured while on drugs or alcohol, for instance, they won't receive any workers compensation insurance help. Other issues that will cause workers compensation insurance claims to be refused include injuries caused due to horseplay, injuries caused by a fight breaking out, injuries caused due to violation of company policy, and more. Also, injuries that occur while not on the job won't be covered under workers compensation insurance.

While these basics of workers compensation insurance are fairly easy to understand, the real complexities come in actually opening a workers' compensation insurance policy for your workers. In most instances you will make a large down payment before workers compensation insurance is enacted. The amount is based on an estimate of your total employee salaries and on basic insurance costs. Then, at the end of the year you'll face an intense audit from the workers compensation insurance provider to ensure that you're paying the proper amount for your workers compensation insurance. You could be billed more or receive a refund for overpayment.

The alternative to this system is known as pay as you go workers compensation insurance and is just what it sounds like. There's no upfront payment to make and no yearend audit. Your workers compensation insurance payments will be based not on estimates but on actual data. This alternative is gaining in popularity daily and is one of the best choices for companies who want to avoid the hassles of traditional workers compensation insurance. Unicorn HRO can provide pay as you go workers compensation insurance as well as tools to effectively manage your workers compensation insurance policies.

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