Workers Compensation Insurance Explained
Workers compensation insurance, commonly called workers’ or workmen’s comp, is a form of insurance designed to provide compensation to workers who have been injured while on the job.
While the details can vary significantly from one plan to the next, insurance plans in this category typically provide for some form of wage replacement, payment and/or reimbursement of medical costs, compensation for economic losses, possibly damages for pain and suffering, and settlements to the insured’s dependents in the case of a fatal work-related accident.
Given this broad range of covered areas – essentially combining the key features of disability insurance, health insurance, and life insurance, among others – workers’ comp is certainly one of the more critical forms of insurance an individual can obtain. By knowing all you can about workers comp you can ensure that if an accident happens on the job you are covered. If you are not you could find yourself and your family in trouble down the road. We all need money to pay the rent and buy food and getting compensation for an injury at work can help you to pay for these necessities.
Workers’ compensation insurance is typically associated historically with labor or professional unions, and is often the result of coordinated campaigns to obtain the coverage for the union members. Proponents of workers’ comp cite improved working conditions, economic support for employees, and the safety net provided by the insurance, as key benefits of workers’ comp. Critics of this type of insurance cite increased costs to employers and potential infringement on workers’ rights to seek recompense on their own. Another concern that is frequently raised is the possibility of American companies moving parts of their operations or even their entire companies to areas with looser workers’ comp law. In the United States, however, workers’ comp laws are nearly universal, and almost all employers must carry the insurance in some form for their employees.
The body of laws governing workers’ compensation insurance has become extremely complex and varies from state to state. For example, in many states it is illegal to terminate an employee for filing a claim or for reporting an injury incurred at the workplace. This isn’t illegal in all states, however. And while most states don’t allow employers to deny employment based on previous workers’ comp claims, employers are able to check a commercially maintained database of claims, a system that could potentially be abused by unethical employers.
Because abuse of the system has occurred on the part of employees as well, stiff fines and other legal penalties are in place for persons who file false claims for workers’ compensation benefits. While stories of supposedly injured employees engaging in physically demanding activities are commonplace, little hard data exists to indicate what percentage, if any, of the claims filed every year are actually fraudulent.
Vigorous investigation by employers, including tactics such as secretly video taping claimants engaged in physical activity, have also undoubtedly helped reduce the number of false claims. Certainly the vast majority of claims filed are the result of legitimate, unavoidable workplace injuries.