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It is mandatory for every employer in the United States of America, with the exception of a few states, to purchase workers’ compensation insurance.

Workers’ Compensation Insurance is a form of security offered to employees and their families in the case that they are injured or die while working. Injuries including loss of limbs, illness, repetitive motion injuries, medical treatments and rehabilitation required for the recovery, total wages lost and death benefits all come under workers’ compensation insurance.

This insurance is not only beneficial for employees, but even the company itself can benefit from it. By purchasing workers’ compensation, a company is more protected from legal matters. Here are the six things every employer and employee should be aware of in regards to workers’ compensation insurance.

Injuries Covered Under Workers’ Compensation

There are scenarios when an employee’s injury is due to their own negligence. Many companies refuse to pay any benefits in a situation like this. It is important for both employers and employees to know that injuries caused partially due to the worker’s fault can come under workers’ compensation insurance. The insurance also covers any injuries that occur when an employee is offsite while performing part of their job. Even if an employee is injured while attending an event sponsored by the company, this is considered a part of the insurance coverage.

Avoiding Workers’ Compensation

Some small-scale businesses attempt to avoid purchasing insurance by declaring their employees as independent contractors. Doing so helps such companies avoid paying their employees any compensation. However, if the IRS becomes aware of this, the company may be subjected to pay large tax penalties and, in in worst cases, may also be held criminally liable.

Workers’ Compensation Fraud

Many believe that the risks of fraud involving workers’ compensation are very high. Although, this is certainly not always the case. According to studies, the risks of fraud involving workers’ compensation insurance are lower than 5%.

Every Business Needs to Purchase Workers’ Compensation

The laws of workers’ compensation are different in every state. However, many states in the US make it mandatory for businesses with just one employee to purchase workers’ compensation. No matter how small or big the business is, purchasing this compensation is compulsory.

Worsening of Preexisting Conditions

In the case where a preexisting medical condition of an employee becomes worse due to work, the business also has to cover the expense of their treatment. It does not matter if the physical condition dates back to when a worker was not working in their present company; the employer is liable to pay for their recovery treatments.

Benefits Cannot Stop Without Notice

A company does not have the right to stop the payments of benefits without notice. As long as the employee is away from their job due to their work injury, the benefits continue. If the employee returns to work and signs a supplemental agreement, the benefits stop. When no such thing happens and the benefits stop, the employee should consult an attorney. Unless a judge declares the end of the benefits, the company cannot stop paying it to the employee.

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