How Workers’ Compensation Works

An employer takes out workers' compensation for their employees. It protects the employer from litigation in the event an employee gets injured or sick while at work. With workers’ compensation, you receive protection from losing out on your wages because of an injury or illness suffered at work. The benefits paid out cushion you from loss of income thanks to a work-related injury or illness. These benefits also pay for any medical costs accrued from the illness or injury that you suffer.

To qualify for the workers’ compensation, your employer must have a valid insurance cover for you. You must also have sustained a work-related illness or injury to file a claim. It means that the illness or injury must be directly related to your work; it must have happened because of the materials or machinery you use to do your job. Furthermore, if your job aggravates a pre-existing condition, you qualify for workers’ compensation. Finally, you must meet the requirements set out by your state to report the injury and illness.

Example of Workers’ Compensation Claim

There are various scenarios under which you can lodge a claim for workers’ compensation. Consider this example. If you work at a timber yard with all sorts of timber sawing machinery, you are at a high risk of injury. Say, one day, you get caught in the machines and unfortunately lose a finger or limb. You then qualify to receive compensation for any medical costs and loss of wages.

Suppose the use of heavy machinery and heavy lifting aggravates an existing condition, you could qualify for compensation. In the unfortunate event that you lose your life while driving to work or during a work shift, then your next of kin qualify for compensation. That is a simple way that the workers’ compensation claim works.

Filing a claim usually follows this process;

When you get an injury or illness at work, you must report it to your employer promptly. Include the nature of illness or injury, the date and time you sustained it, as well as how it occurred. You do this by filing a formal claim that should be available to you at work.

Your employer will then guide you on how to fill in the necessary insurance paperwork

Next, your employer will file the complaint with the insurer. Your employer must stay within conditions set out by the state and the insurer on filing a claim.

The insurer determines whether to approve the claim or not. Should your claim receive the green light, the insurer will follow up with your employer for payment details. The amount payable paid out according to the policy and the policies of the insurance company.

Types of Workers’ Compensation

There are different types of workers' compensation policies. These are the four most common types of policies that an employer will take out for you.

Medical Treatment Compensation Only

This type of policy only covers any medical costs following a work-related injury or illness. These costs include medication, doctors appointments, rehabilitation and related costs. In most cases, you can only receive this payout if you do not have to miss work. This policy assumes that your illness or injury does not hinder you.

Disability Compensation

If your illness or injury renders you incapable of working, you will receive disability compensation. It is a temporary disability if you will resume once you can work at full capacity. Permanent disability payouts assume that you could never return to work at all or in the same capacity.

Rehabilitation Compensation

This compensation covers any ongoing rehabilitation treatment that you will continue to receive even after resuming work. It could also include vocational rehabilitation. Vocational rehabilitation is a programme that will help equip you with new skills if you are unable to return to your previous work capacity due to your new disability. In this case, you qualify for benefits for lost wages over a certain period, depending on your insurer and state.

Death and Funeral Compensation

If you lose your life, this compensation pays out to your next of kin to cover funeral expenses and their lost income. Most insurers will have a limit to these benefits. These vary from state to state, and with insurance providers. Extravagant funeral expenses are not usually approved.

Workers’ Compensation vs. Personal Accident Cover

These two insurance covers have a few similarities, but they differ in principle in two ways:

Workers’ compensation is a policy that only an employer can take out for employees. On the other hand, a personal accident cover covers an individual, and you can get it for yourself.

The workers’ compensation is only for accidents or illness that occur at work or because of work. Personal accident cover benefits cover any accident that you may suffer.