Did you know that all employers that operate in Massachusetts are required to carry workers’ compensation insurance for their employees and for themselves if they are an employee of their company? In addition, the requisite applies no matter the number of employees, or the number of hours worked. The only exception is for domestic based employees who must work at least 16 hours a week in order to be covered under a workers’ compensation policy.

However, members of a limited liability company (LLC), partners of a limited liability partnership (LLP), or sole proprietors of an unincorporated business are not required to carry workers’ compensation insurance for themselves. This exception does not apply to employees who are not members of the LLC or LLP. They must still be covered. So what does your worker’s compensation insurance coverage actually cover? In essence, workers’ compensation helps to cover the costs that are related directly to work injuries.

Your policy covers all medical expenses, missed wages during the recovery period, and compensation for fatal injuries. Your workers’ compensation insurance coverage also protects you from lawsuits that are related to work injuries. If an accident occurs at your workplace, workers’ compensation covers the cost of immediate care, such as an ambulance ride or an emergency room visit. It also helps pay for the injured party’s surgical procedures, medications, hospital stays, and other medical bills.

Ongoing care, such as continuing medication and physical rehabilitation, is also covered. Obviously, a serious injury can prevent one of your employee’s from returning to work for days, weeks, or even months. Your workers’ compensation insurance coverage often pays for part of the wages lost while an employee is recovering from a workplace injury or occupational illness. If a work-related incident happens to be fatal, your workers’ compensation policy pays death benefits that cover funeral expenses, and help support the deceased employee’s family.

Last but certainly not least, workers’ compensation insurance coverage typically includes liability insurance that protects the business, and principals of the business. For example, the insurance policy protects you and your business from any lawsuits that claim an employee as injured due to your negligence. If your employee sues you in a court of law the workers’ compensation insurance covers your attorney fees, court costs, and settlements or judgments that go against you.

That being stated, it is crucial to carry enough workers compensation insurance coverage to fully protect you.  Otherwise you may very well end up going out of pocket for the difference. For example, if you lose a lawsuit that requires a $1 million dollar payout and you only have $500,000 coverage, you are responsible to pay the remaining balance of $500,000. On the other hand, if your workers’ compensation insurance coverage is $1 million or more, you will be fully covered. That means you will not need to go out of pocket to pay the debt.

If you own a business, you need to have the proper business insurance policies in place. Please consult with a professional insurance agent that specializes in providing workers’ compensation insurance. It is important to fully understand exactly what you are buying when it comes to insurance policies. If you have any questions, please call (508) 831-0133 to contact an associate at Zawada Insurance. We are happy to walk you through the details of your insurance policies and explain your coverage options. We look forward to helping you with all of your personal and or business related insurance needs now and in the future.