Workers Compensation Insurance
Workers compensation insurance is usually required in most states. New Jersey does require employers to provide workers compensation insurance. Also known as “workmans comp,” workers compensation insurance coverage represents a compromise between employers and employees regarding employment related injuries or illnesses. Here’s how workmans comp works:
Your employees relinquish their right to sue you if they suffer an on-the-job injury or illness. In return, you, the employer, agree to provide state-mandated benefits as a result of that on-the-job injury or illness.
To ensure employees have the money to pay these state-mandated benefits, most states require that employers demonstrate that they have the financial ability to pay any claims that may arise. Typically this financial ability is demonstrated through the purchase of workers’ compensation insurance. Laws regarding workers’ compensation insurance vary by state.
Contact TIA today to learn the workmans comp insurance rules in your state.
How Workers Compensation Insurance Works
Most workers compensation insurance policies actually provide two types of coverage:
- Workers Compensation Coverage. This type of insurance provides benefits for injured workers as required by state law regardless of who is at fault for the job-related injury or illness. In other words, whatever benefits your state requires, your workers’ compensation policy would provide.
- Employers’ Liability Coverage. This additional coverage protects employers if they are sued for damages arising from employment–related accidents or diseases. However, to collect benefits provided by employer’s liability coverage, the employee, as well as anyone else not covered by workers’ compensation laws (i.e., spouses and dependents), would have to prove that the employer was legally responsible for the employee’s injury or disease.
