TUESDAY, APRIL 27, 2021
In the case of liability insurance, fault is a major factor that helps calculate who is at fault and who will receive compensation. Workers compensation operates differently than most liability policies, however. Workers compensation will generally cover employee injuries no matter the fault, but this itself has limitations.
Why Fault Does Not Matter
In most workers’ compensation insurance policies, the goal is to provide financial compensation to cover most or all of a worker’s injury costs if they happened during the normal course of business. That sounds pretty simple.
Even if an employee makes a mistake or has an accident on the job, they could still qualify for a workers compensation claim. One big instance in which this does not apply is intention. If a worker specifically hurts himself or herself because they want to collect workers’ compensation coverage, they generally do not have protection. Coverage is not going to pay out if the worker specifically or maliciously tries to file a claim. This would be an instance of fraud. Be sure to report that to your insurance company.
Workers compensation also may not cover instances where an employee starts a fight or is horsing around instead of working at the time of the injury, nor does it cover criminal acts. If an employee is stealing from the business and is injured in the process, for example, their injuries may not be covered. As long as an employee is working, however, they should generally be covered under workers compensation insurance.
Why Is This the Coverage Setup?
In most cases, workers’ compensation is a way for employers to avoid lawsuits because a worker can sue you if he or she has a reason to do so, especially after an injury.
However, by providing workers’ compensation insurance, there is less likely a chance of that occurring. In some systems, the worker accepting workers’ compensation surrendered the right to sue the employer, according to the Insurance Information Institute. This does not apply in all states, and some limitations apply across the board (such as in situations where claim limits are a concern).
What applies in your situation? If an employee suffers an injury, you have the legal right to question it, even if you provide the employee with your workers’ compensation. If you believe it was an intentional injury, tell your business insurance company about it. They will pursue this if it is worthwhile.
Can Employees be Fired While Out on Workers Compensation?
You cannot fire an employee for filing a claim or if they are unable to work due to a work-related injury. Doing so can land you in legal trouble that may not be covered under your business’ workers compensation policy. You can work with your workers’ compensation insurance company to minimize the risk of having to pay out on claims that are fraudulent.
Employees who are fired while out on workers compensation purely because they are unable to work are entitled to pursue legal action.
How Much is Workers Compensation?
The cost of workers compensation is primarily based on your business’ payroll. The larger your business, the more you will pay for workers compensation insurance. Premiums may also vary depending on your location and requirements.
Every state has different requirements when it comes to workers compensation so be sure to check your location’s requirements. Texas is the only state that does not legally require workers compensation. This doesn’t mean that you should go without, however. Operating a business without workers compensation leaves you open to a variety of lawsuits and claims when it comes to employee injuries. A single lawsuit can cost you significantly more than a workers compensation policy, so shop around and speak with an insurance agent about saving money on important coverage.
Does Workers Compensation Work with Commercial Auto Insurance?
In some cases, you may have commercial auto insurance for vehicles owned and/or used by your business for work purposes. Commercial auto insurance policies come with liability as required by state law, so which pays first? Workers compensation or commercial auto insurance?
As a rule, workers compensation insurance will pay first as long as the accident occurred in the course of employment—in other words, as long as the driver was operating the vehicle for work purposes. Generally your insurance agents will work together to calculate which coverage will pay what compensation, so it can vary per incident and per provider.
Keep in mind that fault matters a lot more when it comes to commercial auto insurance. Liability insurance under commercial auto insurance covers other parties injured in the accident aside from the employee and their passengers. If you have any questions about your policy, be sure to speak with an insurance agent to make sure you and your employees are covered.
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