An absolute top priority of any responsible business owner is protecting their team. Unfortunately, workplace injuries can and do occur, which is why workers’ compensation insurance exists. But what happens when an employee gets injured on the job and wants to sue you? Can they still press charges even if you have workers’ compensation coverage? The good news is that we know, so you don’t have to.
Independent insurance agents know all about workers’ compensation and how it protects you as an employer. They know exactly what kind of coverage to get you set up with to avoid ugly lawsuits with employees, and they’ll help you find all the coverage you need long before you need it. But before we get ahead of ourselves, let’s take a closer look at workers’ compensation and potential employee lawsuits.
If I Have Workers’ Compensation, Can an Injured Employee Still Sue Me?
This may come as a relief to some employers, because the answer is no, they can’t. Even if an employee gets badly injured on the job, if you’ve got workers’ comp coverage, the employee has waived their right to sue you. Further, even if the employee’s workers’ comp claim gets denied, they still cannot sue you. That’s one of the major reasons for having this coverage in the first place, to protect against employee lawsuits.
Now, while your employee cannot sue you or your business if they get injured and you have workers’ comp insurance, they could sue a contractor that hired you or your business. If an employee got injured while doing a task ordered by the contractor, they could press charges and your general liability insurance as the employer would kick in to cover the legal fees.
What If I Don’t Have Workers’ Comp?
Well then yes, an employee could absolutely sue you if they got injured or ill on the job. As the employer in this scenario, you’re pretty much a sitting duck if charges get brought against you by an employee, too. Employers are not allowed to use the following defenses in a legal battle with an employee:
- Saying the employee was responsible for their own injury
- Saying another employee was responsible for the injury
- Saying that the employee was told the job was dangerous when they were hired
So, the employer basically doesn’t have much room for a good defense argument in the event an injured or ill employee sues them. That’s why it’s so important to work with an independent insurance agent to get your business set up with adequate workers’ comp coverage ASAP.
What Does Workers’ Comp Cover?
Basically, it covers your business from a legal standpoint if an employee gets injured, ill, develops a disability, or even dies while performing tasks required of the job. Coverage also applies to incidents that occur when an employee is traveling between job sites or even doing job tasks outside of the business’s office. Injuries, etc. sustained from using workplace equipment or materials is also covered.
Basic workers’ comp insurance policies include the following coverages:
- Medical care: Workers’ comp reimburses employers for medical care of their employees, including doctor office and hospital visits, rehabilitation, medications, diagnosis fees, long-term treatment, and more.
- Employee wages: Workers’ comp provides reimbursement of hourly wages or salary that an employee loses while out of work due to workplace injury, illness, or disability.
- Legal protection: If a deceased employee’s family sues the business, workers’ comp offers protection by covering attorney and court fees, as well as settlements the business may be ordered to pay.
- Benefits: In the event of the disability or death of an employee, workers’ comp may pay out a lump-sum benefit. If the employee is killed, the benefit will be paid to their dependents.
- Funeral costs: If an employee dies on the job, workers’ comp may provide reimbursement for funeral arrangements and services.
Workers’ comp also provides protection against employee injury, etc. due to other covered disasters, such as workplace violence, terrorist attacks, and natural disasters. Your independent insurance agent can tell you even more about all the important ways workers’ comp can protect your business and workers.
Is Workers’ Comp Mandatory for All Businesses?
While generally the answer is yes in most states, there are certain exceptions. It’s really a safe bet to just get coverage no matter what if you have any employees, though. Workers’ comp requirements vary by state, so it’s crucial to find out your location’s specific laws. Certain states provide exemptions for businesses with fewer than a certain number of employees, for agricultural businesses, or for businesses that maintain a low payroll under a specified amount.
What Does Disability Insurance Cover?
Disability insurance operates a bit differently from workers’ comp coverage. The main purpose of disability insurance is to reimburse a large portion of an employee’s income (i.e., usually two-thirds) if they become unable to work due to a disability. Employees do not have to pay taxes on the income received through disability insurance.
There are two main types of disability insurance:
- Short-term disability insurance: There is generally a waiting period of 30 days before benefits kick in, and employees are typically compensated for up to six months.
- Long-term disability insurance: Coverage kicks in after short-term disability insurance’s term is up, as long as a doctor verifies that the employee is still unable to work. Long-term disability insurance policies may cover the employee all the way up until they turn 65 or are medically cleared to return to work.
A disability does not have to develop due to job-related tasks in order to qualify for reimbursement. Talk with your independent insurance agent to see if disability insurance is an important coverage for you to consider.
What Else Does My Business Insurance Cover?
Workers’ comp is just one of several important components included in standard business insurance policies. Business insurance also includes the following critical coverages:
- General liability: Covers property damage or injury claims made by a third party.
- Property insurance: Covers loss of or damage to your physical property, including your office’s structure and inventory. Protected mishaps include fires, storms, and more.
- Business auto: Covers company vehicles against perils like theft, vandalism, and natural disasters.
Standard business insurance policies provide a lot of the basic protections needed by all businesses, but your unique workplace may require more coverage. Your independent insurance agent can help you identify and fill any gaps in your coverage.
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What Other Business Coverages Should I Consider Adding?
To provide your business with a fuller picture of coverage, you may need to purchase multiple types of insurance beyond what’s included in your business policy. The following types of insurance are commonly added on to standard business policies:
- Professional liability: Covers claims made by clients who have suffered financial loss due to the work they've hired you for. Lawyers and consultants, for example, typically need this coverage.
- Cyber liability: Covers data breaches and other attacks a business suffers at the hands of cybercriminals. This coverage is becoming increasingly important for modern businesses.
- Crime insurance: Covers losses due to criminal activity such as theft or fraud. Coverage also applies to employees who steal from the company.
- Boiler & machinery: Covers electric equipment in the building (e.g., AC units and boilers) that breaks down due to power surges, etc.
Your independent insurance agent can help you identify any areas where your business may be lacking important coverage, and help you fill in these gaps.
Here’s How an Independent Insurance Agent Would Help
When it comes to protecting your business against employee lawsuits and everything else, no one’s better equipped to help than an independent insurance agent. These agents search through multiple carriers to find providers who specialize in business insurance and workers’ comp, deliver quotes from a number of different sources, and walk you through them all to find the best blend of coverage and cost.
TrustedChoice.com Article | Reviewed by Paul Martin
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