Many business owners do not know that workers compensation insurance is mandatory for any company with employees that does business in New York. Without any sort of coverage for workman’s compensation, an employee who either receives an injury or becomes ill from a work-related activity can sue the employer if he or she refuses to give suitable compensation for the employee’s injury. Workers compensation insurance, or workers comp, alleviates both by providing a tradeoff that is commonly known as “the compensation bargain,” where employers provide wage replacement and medical benefits for employees who have been injured in the course of employment, in exchange for a mandatory relinquishment of the employee’s right to sue their proprietor for damages.
Workers compensation in New York can offer a variety of coverage, each adhering to the claimed injury or illness and the subsequent damages caused by them. Provisions can be made for payments in place of wages (functioning as a form of disability insurance,) compensation for economic loss, reimbursement and/or payment for medical expenses (functioning as a form of health insurance,) and benefits to the dependents of those killed during employment (functioning as a form of life insurance.) It is also important to know that workers comp does not only pertain to injuries acquired at the workplace; which means that if an employee suffers an injury whilst traveling on business, a job errand, or even attending a business related social function, he or she would reap the benefits of workers liability insurance.
Although it is mandated by the state for the benefit of the employees, a workers compensation plan isn’t just another overhead expense for business owners. Besides the initial benefit of the relinquishment of the employee’s right to sue the employer, a good insurance plan can provide many affordable benefits for business owners as well as employees. Most workman’s compensation policies contain an employer’s liability section (sometimes known as “part two” coverage,) that covers the business owners legal expenses if the employee makes an inappropriate claim for a work-related illness or injury. Although the workers compensation system is designed to give benefits to all employees who have been injured, even if the injury was caused by an employer or employee’s carelessness, there are limitations to the injuries that employees can claim. For instance, an injury that was the result of an employee being intoxicated, or under the influence of illegal drugs, cannot be covered by a workers compensation program. This also goes for any self-inflicted injuries (including any physical altercations that were started by the employee,) injuries suffered while an employee was committing a crime or while not on the job, and injuries suffered when the employee’s conduct did not adhere to company policy. This creates a system that both provides benefits for the employee’s, and provides protection against insurance fraud or unnecessary claims for the employer.
Insurance is a business of risk. In the case of workers compensation, the employer is paying to transfer the risk of an employee being injured while on the job to the insurance company. Considering the benefits received from workman’s compensation, it’s amazing that many New York business owners do not consider it to be a priority expense, but an ancillary charge that is made only to adhere to state guidelines. Workers comp insurance is a protection to the livelihood of your business, it is important to take it with a level of seriousness, for if something were to happen to your employee’s while they were on the clock, leading them to subsequently sue the employer for damages, it would be the business, and in turn the livelihood of the business owner, that would have to hold the financial burden.