What is Workers Compensation Insurance?

If you are injured on the job you will require compensation for lost wages and medical bills. But who do you go to for compensation? Before workers compensation laws were enacted employees would have to sue the employer and prove that they were at fault or negligent. This did not help either party and would leave someone with a huge financial loss. After many years of passing laws and countless court cases each state in the union now has some form of compulsory workers compensation law requiring every business with employees to have a worker’s compensation insurance policy in force. This gives every employee the right to medical benefits and wage replacement in case of injury, while relinquishing their right to sue the employer.

How does workers compensation work?
When a business purchases workers compensation insurance they are paying an annual premium for a injury or illness benefit. Workers Comp provides payments for medic bills and lost wages to employees who are hurt on the job and may not return. To receive medical payments and wage replacement a claim must be filed. After treatment is administered the employee needs to contact the employer and file a claim with the insurance carrier. This is the only way benefits can be given out to the employees. A claim will trigger the insurance carrier to review the claim and determine if the policy benefits apply. The insurance carrier will do a thorough investigation reviewing the injury, talking to witnesses and contacting the employer. They are trying to determine if the injury was work related and covered by the insurance. They will investigate the seriousness of the injury the ability of the employee to continue to work. These factors will decide the amount of wage replacement the employee can receive. Please refer to your states workers compensation laws for more details.

For the Employee
The employee is guaranteed the right to medical payments and wage replacement if they are injured or become ill on the job. If injured, workers’ compensation has medical benefits to pay for reasonable medical treatment, prescriptions and hospitalization services related to the work injury. There are different medical benefits for different types of injury. There are temporary total disability benefits, permanent partial benefits, permanent total benefit, and death benefits. These benefits are to help the employee while out of work for an extended period of time usually more than 7 days. Providing wage replacement (generally two-thirds of their wages are paid) and medical payments.

For the Employer
Workers compensation protects the employer from law suit by their employees, with an active workers compensation policy, employees relinquishing their right to sue the employer. This gives the employee confidence that the employer is taking care of them if an injury occurs. Every state has workers compensation laws that the employers need to follow. Compulsory workers compensation law makes it mandatory to provide workers comp or face a penalty from the state. These penalties can be expensive so avoid them and contact your local agent to find out more about the state specific workers compensation law.

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Professional liability insurance has many names. You can call it professional indemnity insurance, errors and omissions or malpractice insurance.  The name depends on the profession you are in.  For instance if you are a physician, hospital, clinic or healthcare provider you will call it malpractice insurance.  If you are in a non-medical profession such as an IT consultant, lawyer, accountant or insurance broker you would call it errors and omissions.  The name is unimportant but what is important is how and why professional liability insurance exists.

A profession is defined as an occupation requiring considerable training and specialized study.  Special education and ethical conduct usually accompany the duties of a professional and because of this professional liability addresses the liability that general liability misses. General liability is a great for bodily injury claims or property damage for professionals who provide advice or a service need protection from bearing the full cost of defending your legal liability.

In the business world there a several factors that influence the legal liability of professionals, the professional/client relationship, expectations regarding professional services, standard of care, legal environment such as laws/regulations, prior court decisions, and the litigious nature of society.  When you enter in to a contract with a client your legal liability is to meet those requirements. Professional liability is designed to handle claims of alleged failure to perform such as negligence, misrepresentation, violation of good faith and fair dealing, and inaccurate advice.

If you work leads to a financial loss for your client your business could be responsible for damages and court fees.  Professional liability coverage is focused to protect your business and the work you do. A client can allege that you failed to perform your part, made an error or omission in the service or product sold.  For example a software product fails to perform properly, it may directly cause financial losses which could potentially be attributed to the software developer’s misrepresentation of the product capabilities or a custom-designed product fails without causing damage to person or property other than to the subject product itself, the cost to redesign, repair or replace the failed product itself can fall on to the manufacturer..  These are potential cause for legal action and with professional liability insurance (errors and omission) you can protect your business.

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Why do I need General Liability Insurance?

You may not see a direct need for your business to have general liability insurance.  The question “Why would I need general liability insurance?” is one an insurance agent answers every day.  Insurance protects you for the unexpected, making sure your business is able to operate through any obstacle life has to offer. Here are five reasons you would need general liability insurance:

In order for you to perform your job your client may for evidence of insurance.  This is the number one reason we find that any business would need general liability.  Almost every wok agreement contract has insurance requirements you must meet.   If you don’t have the insurance already you will need to find a quote fast or your client may offer the contract to another better prepared business.  Don’t let this happen and prepare your business with an insurance program.  Your client is asking for this insurance in case of bodily injury or property damage.  Insurance will cover you for your responsibility in any of these events

Clients Visit your place of work
If your business involves customers or clients visiting your work place you are at risk if someone is injured or damages property.  Avoid the anxiety with general liability insurance.  If a person were to slip trip or fall they may want to hold you responsible for medical bills or lawyer’s fees.   General liability provides insurance coverage for lawsuit and medical payments.

Have employees at third party locations
When you send an employee to a third party location your business is responsible for their actions and work they do.  Off premise work needs to be insured just like having customers in your place of work.  A bodily injury or damage to property can occur and without general liability lawsuits or medical bills will come out of your pocket.  General liability extends its liability to where you are performing your job.  While doing maintenance work at a client site a person slip trips or falls across liquid on the floor due to the maintenance work you are responsible.

Access to clients equipment or server
For many businesses it is not uncommon for you to be in the care of, custody or control of your client’s equipment.   General liability insurance covers you from fire, storm damage or theft of your clients property.  If you are working with a company’s systems integration, network or server this coverage is crucial.  Commercial general liability insurance is able to cover computer equipment from damage, certain power failures and computer viruses.

Write or Speak about Clients business
When it is your job to write or speak about a clients business you are at risk from offending a competitor or consumer.  They may see your work as libel, slander, disparagement, or infringing on a copyright.   General liability provides coverage for personal or advertising injury designed to cover publication of material that slanders or libels another person or organization. Legal defense costs from lawsuits that claim false, malicious or misleading statements in advertisements, promotional flyers, brochures, or Web sites, etc. can also be covered.

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