Business Type :

Workers’ compensation insurance, commonly called workers’ or workman’s comp, is a mandate whereby businesses are required to purchase insurance for employees who are injured during their normal course of duties while on a job or acquire an illness or condition directly attributed to the workplace.

Each state sets its own guidelines, therefore the legal requirements for workers’ compensation for companies can vary slightly depending on where the business is located. For example, it’s required in the state of New Jersey. The structure and procedures, however, are generally the same throughout the United States, and are subject to each state’s specific laws. Businesses that work for the federal government are covered under a separate set of rules regardless of the state in which they are located.

The workers’ compensation system is theoretically a compromise between a business and its employees, as workers receive insurance coverage at no cost to themselves no matter who is at fault if injuries or illnesses occur either on the job or as a result of repetitive circumstances or possibly harmful environments.

In exchange, workers’ compensation insurance protects businesses from lawsuits seeking monetary damages for medical bills and related pain and suffering.

What Employers Must Cover

Illnesses and injuries do not necessarily have to occur in the primary workplace. For example, if an employee becomes injured or ill while traveling on work-related business, that employee would receive compensation under the system.

On-the-job accidents involving machinery, unexpected mishaps, and similar situations are what most individuals think of when they hear the term “workers’ compensation,” but the legal reality encompasses much more.

Repetitive stress injuries, cumulative trauma disorder, occupational overuse syndrome, and regional musculoskeletal disorder involving the upper and lower back and other joints in the body due to manual tasks performed on the job are also covered. Examples include carpal tunnel syndrome, rotator cuff syndrome, Reynaud’s disease, medial epicondylitis (golfer’s elbow), and lateral epicondylitis (tennis elbow).

Employers must also cover conditions that develop over time. Many result for regular exposure to chemicals or simply an unhealthy work environment. Examples include various types of cancers, lung diseases, and stress-related conditions.

Benefits Provided By Workers’ Comp

Monetary compensation is perhaps the largest component, covering items such as:

  • Surgeries and other necessary medical treatments, doctor visits, prescription drugs
  • Lost income
  • Vocational rehabilitation or retraining if a worker is unable to return to his or her previous job along with job placement in some cases
  • Death benefits to survivors if an employee is killed

When injuries result in permanent disability, businesses also must provide long-term disability benefits to help workers pay for ongoing medical treatments and maintain their quality of life.

Insurance Policies and Workers’ Legal Rights

All business must clearly post notices regarding worker’s compensation in an area frequented by employees during their work day. In addition, all newly hired employees should receive written information about the company’s worker’s compensation policy that also includes information on how to file a claim.

This information must include:

  • Statement of the right to receive medical treatment when injured
  • Insurance carrier name
  • Where to direct claims adjustment
  • Details about benefits available under the company’s policy

Employer Responsibilities When Injuries Occur

Employers should provide injured workers with an appropriate claim form within 24 hours after notification of the injury. Employers are also responsible for making sure that their staff complete accident reports in a timely manner. Injured employees should receive assistance in completing claims forms and in working with the company’s insurance agent, if needed.

It’s simply not enough, however, to make sure that claim forms are properly completed. Businesses need to work closely with their insurance companies to make sure that fraudulent claims are not filed.

For more information on how you can properly protect your business and employees, contact us at to learn about our custom business insurance solutions.