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How Does Workers' Comp Work?

Updated 02:33 PM EST, Tue March 12, 2019

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How Does Workers' Compensation Work?

Workers’ compensation insurance gives your employees benefits if they have a work-related injury or illness. Also known as workers’ comp or workman’s comp insurance, this coverage can help cover your injured or sick employees’ medical expenses. It can also help replace wages from lost work time.
 
Our workers’ compensation insurance aims to help protect you and your employees. Our insurance is designed to:
 
  • Support companies in various industries
  • Promote employee safety
  • Get employees back to work or transitional work
  • Provide access to training for new skills
Most states require companies with employees to carry workers’ compensation insurance. But workers’ comp requirements vary from state to state.
 
When a workers’ compensation claim is filed, it has to be accepted by the injured or sick employee. Employees can receive workers’ compensation insurance, regardless of who is at fault for the injuries or illness.
 

Workers’ Comp Benefits Cover Both Employees and Employers

The Hartford’s workers’ compensation insurance is meant to protect both the employer and employee. It provides benefits to both parties.
 

Workers’ Comp Benefits for Employees

For a sick or injured employee, the workers’ comp benefits depends on the nature of the injury, state requirements, and the specific policy. It can also give employees access to vocational rehabilitation, compensation for permanent injuries and survivors’ benefits.
 

Workers’ Comp Benefits for Employers

For employers, a workers’ compensation insurance policy helps protect the business and owner. Without this insurance, you could be financially responsible if an employee gets injured or sick from a work-related cause.
 
For example, say one of your employees slips and falls while carrying a heavy box. He’s taken to the hospital by the ambulance. He finds out his arm is broken and it requires surgery. You could be responsible for paying your employee’s medical expenses out of pocket. If you can’t cover the costs, it could put your business at risk.
 

Who Pays for Workers’ Comp?

Although workers’ comp insurance provides benefits to the employee, they aren’t required to contribute to the cost. The employer pays the insurance company for workers’ comp insurance coverage.
 
The workers’ comp claims process can be complex. It varies from state to state. But generally, if one of your employees is injured or sick from a work-related cause, they have to report it to you. Employees have a certain amount of time to report an injury to you. If they wait too long, you won’t be able to file a workers’ comp claim. This could mean they’ll lose their benefits.
 
After your employee reports their injury or illness to you, you can file the workers’ compensation claim. Your state’s Workers’ Compensation Board or agency is responsible for processing the claim. The board or agency directs an insurance company to provide benefits and payments to the employee.
 
As an employer, you’ll also have to report the incident to the Occupational Safety and Health Administration. Depending on the severity of the injury, you may have to report the incident within eight to 24 hours.
 

What Injuries Are and Are Not Covered by Workers’ Compensation Insurance?

Workers’ compensation insurance covers injuries that result from an accident. There are certain incidences where workers’ comp insurance won’t provide coverage. So what does workers’ comp cover? Here are a few examples:
 
  • Carpal tunnel
  • Back injuries from repetitive movement
  • Injury to the lungs for breathing toxic substances
  • Slip and falls at work
  • Injuries sustained in a car accident while driving for business
Below are examples of incidents where workman’s comp insurance would not provide coverage.
 
  • Benefits can be denied if blood/alcohol tests reveal the employee was under the influence at the time of the injury
  • Self-inflicted injuries
  • The employee was violating a law or company policy
  • The employee was not on the job at the time of the injury

How Does a Workers’ Comp Claim Affect the Employer?

Most states require employers to carry workers’ compensation insurance. If they don’t, they can face fines and lawsuits. If you have employees, you may need workers’ compensation insurance. You can get this coverage online, by phone, or through an insurance agent.
 

Covered Employees

Workers’ compensation insurance covers a variety of employees. There are states, however, that have regulations excluding certain types of employees from being covered by workers’ comp insurance. These employees may include:
 
  • Independent contractors
  • Business owners
  • Volunteers
  • Employees of private homes
  • Farmers and farmhands
  • Maritime employees
  • Railroad employees
  • Casual workers

Injuries That Are Normally Covered in a Worker’s Comp Claim

If one of your employees suffers a work-related injury or illness, The Hartford’s workers’ compensation insurance can help replace their wages from lost work time. It can also help cover their medical expenses during their recovery. If the worker’s family wants to sue your business, workers’ compensation insurance can also help cover the legal fees.
 
There are certain situations where workers’ compensation insurance would not provide coverage to an employee. These include:
 
  • If your injury or illness is not work-related
  • If you sustain injuries in a car accident during your commute to and from work
  • You intentionally hurt yourself
Workers’ comp insurance provides benefits to employees who are sick or injured from a work-related cause. This means an employee doesn’t just have to be on work property to receive coverage. For example, let’s say your employee is delivering a product or meeting with a client. While he’s driving, he gets into a car accident. He sustains a neck injury and has to be transported to a nearby hospital. Because he sustained the injury while performing a work duty, he is eligible for workers’ compensation insurance coverage.
 

How Insurance Pays a Workers’ Comp Claim

After a workers’ comp claim is filed and processed, an injured or sick employee can be paid if the employer and insurance carrier agrees the injuries or illness is work-related.
 
Claims can be disputed if an employer does not believe the injury or illness was caused by their work. The dispute process depends on the state your business is in. Generally, it involves appearing before a panel or a workers’ compensation agency to explain why you don’t agree with your employee’s claim.
 
The panel or agency will determine who it believes is right. If it determines the employee was injured or sick from a work-related cause, they can receive workers’ compensation benefits. If it determines the employer is correct, the employee won’t receive benefits.
 

Workers’ Comp Claims Process

Both the employer and the employee have requirements to complete during the workers’ comp claims process. If an employee is injured or sick, they have to report it to you in a timely manner to be eligible for workers’ compensation benefits. After their report, here’s what you do:
 
  1. Give the injured or sick employee the required paperwork and forms. These will be used to file a workers’ compensation claim with the insurance company.
  2. When the employee returns the completed forms and paperwork, file a claim with the insurance company. You may also have to notify your state’s workers’ compensation agency or board about the injury or illness.
  3. Depending on the outcome of the process, the employee may appeal the decision.

How Much Does Workers’ Compensation Insurance Cost?

The Hartford’s workers’ compensation insurance rates and premiums can vary by state. The rates are based on different factors, which may include:
 
  • The industry your business is in
  • The number of employees you have
  • The safety record of your business
  • The size of your payroll
Workers’ compensation regulations also differ from state to state. While a majority of states require employers to carry workers’ compensation insurance if they have employees, the requirements can vary. For example, some states may have exclusions for certain types of businesses that don’t need to have workers’ compensation insurance – even if they have employees. Some regulations may also allow a business with five or less employees to not carry a workers’ comp insurance policy.
 

Other Workers’ Comp Considerations

When you’re looking at workers’ comp insurance, make sure you know your state’s regulations. From the requirements to the claims process, workers’ compensation insurance can be complex. Working with an experienced insurance company is important and can help you find the right level of coverage.
 
That’s where we come in. We’ve been helping protect companies for over 200 years. Our insurance specialists are here to help answer any questions you have about workers’ comp insurance. And if one of your employees gets sick or injured, we’re here to help the both of you. We’ll walk you through the claims process and we’ll work to get your employee recovered and back to work as quickly as possible.
 
Find out more about our workers’ compensation insurance. Get a quote today. Or you can speak with one of your specialists by calling 1-855-829-1683.
 

Certain coverages vary by state and may not be available to all businesses. All Hartford coverages and services described on this page may be offered by one or more of the property and casualty insurance company subsidiaries of The Hartford Financial Services Group, Inc. In TX, this insurance is written by Sentinel Insurance Company, Ltd., Hartford Casualty Insurance Company, Hartford Lloyd’s Insurance Company, Property and Casualty Insurance Company of Hartford, Hartford Underwriters Insurance Company, Twin City Fire Insurance Company, Hartford Accident and Indemnity Company and Hartford Fire Insurance Company. In CA by Sentinel Insurance Company, Ltd. (CA license # 8701) and its property and casualty insurance company affiliates, One Hartford Plaza, Hartford, CT 06155.
 
The Hartford® is The Hartford Financial Services Group, Inc. and its property and casualty subsidiaries, including issuing company, Hartford Fire Insurance Company. Its headquarters is in Hartford, CT.