Types of Workers' Compensation

Types of Workers’ Compensation Insurance Benefits

Workers’ Compensation Insurance provides benefits to employees who become injured or ill from doing their job. It can also provide benefits to an employee’s beneficiaries if the employee dies as a result of an accident that happened while on the job. This insurance is provided to employees by their employer and is mutually beneficial for both. Without Workers’ Compensation Insurance, employees might be more inclined to make claims against their employer to pay the costs of work related injuries and illnesses. In most states it is a requirement for employers to provide this coverage for employees.
 
Workers’ Comp benefits usually fall into four categories: medical treatment, disability, vocational rehabilitation, and death and funeral services. Specific details of coverage benefits may vary between state lines.
 

Medical Treatment

Workers’ Compensation typically covers the costs an employee might incur for necessary medical treatment for a covered injury or illness. This could include doctor’s appointments, hospital visits, emergency room visits, medications, and therapy and rehabilitation treatments. It typically also includes coverage for medical equipment such as crutches and wheelchairs.
 
Workers’ Comp plans can vary greatly. Some plans have a provider network of doctors and healthcare workers. Employees under this type of plan typically have access to a broad selection of doctors and healthcare workers in the network. Treatment from doctors and healthcare workers who are not within the provider network may not be covered or may be covered at a higher rate.
 
Some Workers’ Comp plans may have a ruling process for determining whether or not a treatment is necessary. This can help protect patients as well as assist in keeping costs down by helping avoid the risk and expense of unnecessary treatments. Coverage plans may require a doctor’s approval for certain treatments. Without the doctor’s approval, the treatment may not be covered.
 
Ongoing care, such as physical therapy and chiropractic treatments are usually covered by Workers’ Compensation Insurance. Alternative treatments such as acupuncture, naturopathic and homeopathic medicine may not be covered.
 
Medical issues that arise as an indirect result of a covered workplace injury or illness can sometimes be covered. For example, an employee might injure his ankle in a covered workplace accident. The ankle injury then causes the employee to walk differently. Due to the change in the employee’s gait, the employee develops low back problems. In some cases, Workman’s Compensation Insurance may cover treatments for the low back problems that developed because of the work related ankle injury.
 

Disability

Workers’ Compensation Insurance can help cover an employee’s wages while the employee is unable to work because of a covered workplace injury or illness. For example, an employee injures his back while moving heavy boxes at work. The employee is unable to work for two weeks because of the injury. Workman’s Compensation Insurance can help provide the employee with a percentage of his lost wages while he is out of work because of the covered accident. Work-related disability is usually classified into four different categories: temporary total, temporary partial, permanent total and permanent partial.
 
  • Temporary Total means that an employee is completely unable to work because of a covered injury or illness. But, this is a temporary situation. Eventually, the employee is expected to be able to return to work and perform at full capacity. The situation referred to above, of an employee who injured his back moving boxes, is an example of temporary total disability.
  • Temporary Partial means that an employee is disabled but can perform work duties at a reduced capacity and does not need to take any time off of work. As an example, an employee breaks her wrist in a car accident while driving for work purposes. She continues to work but only for half days until her wrist is healed.
  • Permanent Total means that an employee is completely unable to work and will not be able to return to their duties. For example, an employee loses his leg while installing machinery. He is unable to work and will never be able to return to his duties or perform similar work.
  • Permanent Partial means that an employee is able to return to work after a covered accident, but they can never work at the capacity that they had before their work related injury or illness. For example, a typist at a law firm permanently injures her hand. She is still able to type, but her productivity is slow because of the permanent injury. This would be considered a permanent partial injury.

Rehabilitation

Workman’s Compensation Insurance provides rehabilitation benefits to help pay for medical and therapeutic care (such as physical therapy) necessary to help an employee cope with and recover from a work related injury or illness. Workman’s Compensation Insurance can also provide vocational rehabilitation benefits to help cover the costs for an injured employee to learn new skills. This way, if they are unable to perform the duties of the position they held prior to their injury or illness, they can return to work and take on a different role. Vocational rehab benefits can help cover the costs of tuition, trainings and certifications that may open doors to different work opportunities.
 
Sometimes, disabled employees may receive a Transferable Skills Analysis. This analysis can help identify other suitable roles that the employee is likely to be able to learn quickly and perform with their disability. Typically, a vocational counselor is assigned to perform the analysis. Vocational counselors can also assist disabled employees in deciding how and where to receive new training or education. Most Workers’ Compensation Insurance programs offer two years of vocational rehabilitation. During that time, the disabled employee can still receive financial benefits for lost wages.
 

Death and Funeral Services

In the unfortunate event that an employee dies because of a work-related illness or injury, Workers’ Compensation Insurance may provide benefits to the deceased employee’s family and dependents. Typically these benefits help cover funeral expenses and lost income.
 
In most cases, benefits can go to immediate family members who were living with the deceased employee. They can also go to dependents who are living with the deceased employee. This can include elderly parents and minors living under the care of the deceased employee. Some states have age limits at which children can no longer receive death benefits. This age limit is usually set at 18. However, states may make an exception and extend the age limit for children with disabilities.
 
Workers’ Compensation Insurance can help cover the costs of funeral expenses for an employee who dies in a work-related incident. Most coverage plans have a set limit for these expenses and this varies by state. Often, expenses are reviewed and may be denied if they are deemed overly extravagant or unnecessary.
 

Lost Income

Workers’ Compensation Insurance may also provide financial payments to beneficiaries after an employee’s death. This can help ease the financial burden left on families when one of the financial providers dies. Typically, the deceased employee’s beneficiaries are eligible to receive a percentage of the deceased employee’s wages. This percentage is usually around 60 percent of the estimated wages the employee would make over the next two years following the death. Usually, this payment is provided in either a lump sum or in monthly increments.
 

General Liability vs. Workers’ Compensation Insurance

General Liability Insurance is different from Worker’s Compensation Insurance. General Liability Insurance is coverage that helps protect businesses against the costs of certain claims of liability. These are typically claims by others of personal injury and property damage. In the case of personal injury for example, General Liability Insurance helps cover the costs of injuries sustained at your business by people who do not work for your company. For example, a customer slips and falls on a wet floor in your store. As a result, the customer sprains his back and needs medical treatment. General Liability Insurance can help cover the costs associated with this incident.
 
Workers’ Compensation Insurance helps provide coverage for injuries and illnesses employees sustain while performing their work duties. Most states require businesses with employees to have this insurance coverage.
 

What Do the Two Policies Have in Common?

The two policies both deal with bodily injury. Most businesses are usually required to retain both coverages. A Workers’ Compensation claim is made for work related illness or bodily injury to an employee. A General Liability claim is made for bodily injury to a third party, such as a customer. Without these policies, customers or third party individuals may have to pay the medical expenses out-of-pocket. This could prompt them to turn around and make a claim against the business owner to cover the costs. Ultimately, Workers’ Comp and General Liability Insurance are mutually beneficial for business owners, employees and third parties.
 

How Do They Differ?

Worker’s Compensation and General Liability Insurance differ in the benefits they provide for a covered accident or illness. Workers’ Comp provides coverage to a business’s employees in the event of a work-related injury or illness. General Liability Insurance helps cover third party individuals who sustain an injury or property damage from your business.
 
Workers’ Comp helps provide coverage for: lost wages, medical expenses, funeral costs, and financial support for beneficiaries. General Liability Insurance helps cover the costs of claims of bodily injury and property damage made against the business. It can also help cover the costs to settle claims when a business is accused of slander, libel, advertising injuries or trademark penalties.
 

Select the Right Workers’ Comp Insurance Coverage for Your Business

When buying Workers’ Compensation Insurance, there are many factors that to take into consideration including state regulations. Buying becomes more complex if you are doing business across state lines. That’s why it’s important to work with an insurance company that understand the nuances of each state’s policies and has deep experience working with businesses.
 
Whether you are a large corporation, a small business, or a start up with big ambitions, The Hartford can help you find the right coverage for your business’s unique needs and budget. You can rest easy knowing that The Hartford is looking after you, your business and your employees. Our claims team has a patented claims process and consistently receives top scores for customer satisfaction. If a workplace accident sidelines an employee, they’ll have access to our industry-leading services and benefits.
 
We also offer convenient billing solutions for business owners, to take the hassle out of paying for insurance so you can focus on running your business.
 
Get a quote today to learn how The Hartford can help protect your business and employees.
 
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.