The majority of workers have a personal or company-based health insurance plan to help cover their medical expenses. Nonetheless every state mandates specific laws for companies to offer worker’s compensation insurance coverage to ensure that employees’ finances are safe in the event of an unexpected work-related injury, illness, or death.

Each state has a different set of laws for worker’s compensation insurance coverage, ranging from the percentages an insurer must pay, drug testing, safety standards, and the minimum amount of employees needed for coverage. While the state of Missouri a company can employ under five employees with no worker’s compensation insurance, in the state of California an employer must have coverage for even one employee. An employer must research their state’s minimum employee requirement for worker’s compensation insurance coverage before hiring employees in order to calculate the entire costs of running the business and to comply with state regulations.

Worker’s compensation insurance coverage protects the employer from complete financial liability and possible legal action. Instead of a huge liability cost, the employer pays a premium based on the size of the business, number of employees, and the amount of injuries the business has been accountable for in the past in comparison with other businesses in the same field and area. Each year a business’s insurance premium can raise, lower, or stay the same depending on these factors.

Coverage of your employees blankets over a wide range of situations and affects of work-related injury. Worker’s compensation covers the employee’s medical expenses and provides a specific percentage of the employee’s wages for the period they are unable to work due to injury. In case of death, coverage also spans to compensate a percentage of the deceased employee’s wages to their family to keep them on their feet. If an employee is no longer able to perform the duties of their previous position, worker’s compensation insurance coverage will also cover the cost of training for another comparable position within the company, if available. Worker’s compensation insurance coverage is a necessity to ensure the safety and peace of mind of all employees within a company in almost any incident-related situation.

The employer can not be covered by any worker’s compensation insurance coverage plan in any state. An alternative for the employer or business owner may be occupational disability insurance coverage, which can span from employer to employee and also covers injuries and illnesses that occur outside of the work place.

It is the employer’s prerogative to choose whether worker’s compensation insurance or occupational disability insurance best fits their company. While occupational disability insurance coverage is more expansive, as it is more expensive since it also covers injuries outside of work. In this respect, occupational disability insurance is much closer to full-coverage health insurance, which most employees already have, than it is to worker’s compensation insurance coverage. For the employer who does not want an increased risk of fraud and lower costs, worker’s compensation insurance coverage is the standard.