Workers compensation insurance provides medical benefits and wage replacement to those employees who are injured at the workplace during the course of their employment. In exchange, the employee abandons the right to sue the employer for his negligence that resulted in the injury.
Workers Compensation is Mandatory By Law
Maintaining workers compensation insurance is mandatory for employers in most states. The employer as well as the employees is protected by the workplace accidents as per The Worker's Compensation Act, which was established in early 1900's. Employers are required to allocate the funds to an insurance policy for workplace injuries. The act provides benefits to both workers and employees in case there is a workplace injury. The no fault system assures supplementary wages as well as the medical treatment to employee with injury. Employers are not required to establish a point or put blame on others in order to get the benefits for the employee. If there is an injury, both employees and employers can be rest assured that the accident would not lead to financial losses of any kind.
While deciding if the compensation is deserved, identification of the person at fault is not necessary and is completely ignored. The amount of compensation depends on a number of different factors including the nature of injury and the time for which the employee would not be able to work among others.
Workers Compensation Impacts Business Profitability as Well
Opting for the workers compensation insurance policy also affects the business in a positive manner. Consider a situation when you have not opted for the same and a worker is injured in an accident at workplace. You would need to allocate the already limited and reserve resources to defend the fault allegations against the claims of an injured worker. Less investment of resources would only mean hampered productivity and less profitability in turn. Opting for the workers compensation insurance could be the perfect alternate in the scenario and provide you with much needed relief.
Workers compensation insurance protects all parties including the employee as well as the employer. All the legal mandatory provisions are included in the "exclusive remedy" and both the employer and employee are cleared on the situations they need to control in case of an injury.
Employee Retaliation and Workers Compensation
The very first question that strikes the mind of an employee is the harassment one might face if he or she brings up a claim against the employer. Because of the same reason, the employers are forbidden by the Federal laws, to discourage, intimidate and harass the employees, who are injured at the workplace and come up with a claim. Engagement of the employer in overt acts including terminations and demotions among others in case the employee uses a worker's compensation insurance coverage can lead him to pay even more damages.
Workers compensation insurance does put a little pressure on the bank account of the employer. However, operating the business without the same would surely result in increased cost. The employers as well as the employees are mutually benefitted through the workers compensation system.