When an employee suffers a work-related injury or illness, workers’ compensation insurance steps into providing benefits based on the type of illness or injury sustained. Workers’ compensation is based on a no-fault system, which means that an injured employee does not need to prove that the injury or illness was someone else’s fault in order to receive workers’ compensation benefits for an on-the-job injury or illness.
Workers’ compensation insurance is divided into two coverage sections:
Part One
In part one, the insurance company agrees to promptly pay all benefits and compensation due to an injured worker by workers’ compensation laws based on the declarations pages of the policy.
Part Two
In part two, the employer is protected against situations where an employee can sue for injuries suffered under common law liability (i.e., consequential bodily injury, loss of consortium, dual capacity, or third party over actions). These types of injuries in the course of employment are not covered under workers’ compensation law ((Source: Dept. of Industrial Relations. June 2016)
According to the Division of Workers’ Compensation, workers’ compensation insurance provides six basic benefits to an injured employee:
- Medical Care
- Temporary Disability Benefits
- Permanent Disability Benefits
- Supplemental Job Displacement Benefits
- Vocational Rehabilitation
- Death Benefits
Do I need workers’ compensation insurance for my facility?
If you are a California employer with at least one W-2 employee, you are required to have workers’ compensation insurance in California. Failing to have workers’ compensation insurance is a criminal offense according to the California Labor Code (Section 3700.5). You may be fined up to $10,000 or stay up to one year in the county jail imprisonment, or both. If an employee is injured and you do not have workers’ compensation insurance, you are responsible for paying all related injury bills.
Workers’ Compensation Insurance protects both the employer and injured employee. By having workers’ compensation insurance, an employer can protect his or her own personal and business asset when a claim occurs by an injured employee through the regulations, laws, and benefits that govern workers’ compensation injuries. An injured employee who suffered an illness or injury at work gets benefits such Medical Care, Disability Benefits, and Vocational Training until he recovers or settles with the workers’ compensation case. Since workers’ compensation insurance has been around for years, workers’ compensation attorneys from either the insurance carrier or the injured employee know how the claim process works, thus help an injured employee.
