Workers Compensation

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Workers Compensation Insurance helps protect businesses and their employees from financial loss when an employee is hurt on the job or gets sick from a work-related cause. Workers’ compensation is also known as workman’s comp, workman’s compensation, and workers’ comp. These terms all mean the same thing and help protect workers from potentially devastating costs of work related injuries. It also helps protect employers from potential damages that could cripple a business based on workers’ comp claims.

What Does Workers’ Compensation Cover?

Workers’ compensation insurance helps cover medical expenses, lost wages, ongoing care costs, as well as funeral expenses if an employee is hurt, becomes sick, or dies as a result of a work-related accident or illness.

What Is Not Covered by Workers’ Comp?

Workers’ compensation insurance can help protect your business and employees in the event of a covered loss, but some situations take place on the job that are not covered by workman's comp insurance. These vary from state to state and are typically determined by different state laws.

Here are a few examples of what most workers’ compensation plans do not cover:

Injuries received by a fight that an employee started
Injuries an employee sustains due to being intoxicated in the workplace
Injuries an employee gets intentionally
Emotional injuries that are not accompanied by a physical workplace trauma

Who Pays for Workers’ Compensation Benefits?

Employers who do not pay for benefits typically purchase workers’ compensation insurance to cover the benefits for employees. Most states require businesses to carry workers’ compensation. Some states do not require it. In those states, coverage is elective.

What Should an Employee Do if Hurt on the Job?

If an employee is injured on the job, they should report the injury to their supervisor immediately. When the injury is reported, the report should include the date, time, and circumstances of the injury. Each state has different requirements about when an injury should be reported, but it’s always best to report the injury as soon as it happens.

Job-related illnesses that worsen over time should be reported as soon as a diagnosis has been obtained by the employee or as soon as they learn the injury or illness is related to their job.

How Do I File a Worker's Compensation Claim?

Filing a workers’ compensation claim as soon as possible is important. Report a workplace injury or illness if:

The injured person is an employee of your business
Your employee became sick due to their work
The employee gets injured because of job-related duties
The employee gets hurt in the workplace

Make sure your employee gets the proper medical treatment if they’re injured on the job. If you need to, call the ambulance or take them to the emergency room. If their recovery requires time off from work, approve their request.

Before filing a claim, you'll need to gather a lot of information. The actual information you’ll need can vary from state to state. Some general information an employer and employee may need to include when filing a claim includes:

Company information (account number and location, policy number)
Injured employee information (name, date of birth, address, phone number, Social Security number, age, gender, etc.)
Details of the incident (date of incident, type of injury, exact body part injured, the cause of injury, estimated number of days the employee will lose, anticipated return date, any witnesses, etc.)

Once the necessary information is collected, you should file the claim with your insurance company as soon as possible. This process can differ depending on the state your business operates in. States may impose a window of time business owners have to report the matter to their workers’ compensation insurance carrier. New York, for example, requires reports to be filed within 30 days.

How Does Workers’ Compensation Insurance Work?

Workers’ compensation insurance helps cover wages and medical benefits if an employee suffers a work-related injury or illness. The goal is to get your employees healthy and back to work as soon as possible.

If an Employee Is Receiving Workman’s Comp Benefits, Are They Eligible for Disability, Unemployment, or Social Security Benefits?

Employees receiving workers’ compensation income benefits are not automatically ineligible for the benefits above. One thing to note is the number of benefits due under other programs may be affected by workers’ comp benefits. Your company’s benefits office should be contacted for specific information regarding eligibility for long-term disability and unemployment insurance benefits.

Do I Have to Have Workers’ Compensation Insurance?

In most states, any employer with one or more employees is required to carry workers compensation insurance. Some states like Texas are exempt from this. Large employers may insure themselves, but they must apply with their state and meet strict self-insurance requirements.

It’s important to note that not all workers must be covered by this type of insurance. For example, workers’ comp doesn’t typically cover owners of the business, independent contractors, domestic workers in private homes, and volunteers. Some states also exclude seasonal workers when the work they do is not part of the employer’s regular business or profession. Other workers comp exemptions exclude certain agricultural businesses, construction businesses, charities, and more.

There are typically two options for buying workman’s comp insurance: private insurance companies and state-funded programs.

** The information on this page was directly pulled from The Hartford's website

Workers Compensation FAQ

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How much does workers' compensation insurance cost?

The cost varies widely depending on your industry, location, payroll size, number of employees, and claims history. The national average is approximately $0.95 per $100 in payroll. For small businesses, median costs run around $92 per month (roughly $1,104 per year), and many small businesses pay under $150/month. Higher-risk industries like construction, roofing, or logging pay significantly more than lower-risk industries like office work or software development. Your experience modification rating (EMR) — based on your history of claims — also plays a major role in your final premium.

How is the workers' comp premium calculated?

Premiums are calculated using the following formula: (Payroll ÷ $100) × Class Code Rate × Experience Modification Rate (EMR) Key factors include: • Job classification codes: Each type of work (e.g., roofer, office clerk, nurse) has a risk-based rate set by the state's rating bureau. • Annual payroll: The larger the payroll, the higher the premium. • Experience Modification Rate (EMR): A number above 1.0 means higher claims history and costs more; below 1.0 rewards safety performance. • Industry and state: Each state sets its own baseline rates. Can employers pass the cost on to employees? No — it is illegal in all states for an employer to deduct workers' comp premiums from employee wages.

What benefits does workers' compensation provide?

A standard workers' compensation policy provides seven core categories of benefits: 1. Medical treatment: Covers all reasonable and necessary medical care for the work-related injury. 2. Temporary disability (lost wages): Typically pays around 60–67% of the employee's average weekly wage while they are unable to work. 3. Permanent disability: Compensation for lasting impairment after the employee has reached maximum medical improvement. 4. Vocational rehabilitation: Job retraining or assistance finding new work if the employee cannot return to their original job. 5. Death benefits: Covers funeral expenses and provides wage replacement to surviving dependents. 6. Disease/occupational illness exposure coverage.

Employers' liability coverage: Protects the employer in lawsuits related to workplace injuries. Q4. How long does a workers' compensation claim take?

Timeline varies based on complexity. For straightforward claims, benefits can begin within a few weeks. The initial investigation period typically runs 14–30 days by state law. If the insurer accepts the claim without dispute, medical benefits are usually paid directly to providers and wage replacement checks begin promptly. If the claim is disputed or denied, the process can extend significantly — contested cases that require a hearing before a workers' comp judge can take 9 to 12 months or longer before a final decision is issued. Hiring a workers' comp attorney can often speed up disputed claims.

What are the deadlines (statute of limitations) for filing a claim?

Deadlines vary by state and are strictly enforced — miss them and you may permanently lose your right to benefits. General guidelines: • Report the injury to your employer: Usually within 30–90 days of the accident. • File a formal claim: Most states require a formal claim to be filed within 1–3 years of the injury date. For example, California allows 1 year; Pennsylvania allows 3 years. • Occupational diseases may have different deadlines — often measured from the date of diagnosis rather than exposure. Always consult your state's workers' compensation laws or an attorney promptly after any work- related injury, as deadlines vary significantly.

Can an injured employee choose their own doctor?

This depends on the state. Some states allow employees to choose their own treating physician. Others require the employee to first see a company-designated or insurer-approved doctor, especially for initial treatment. In some states, employees can switch to their own doctor after an initial period. If you have a pre-designated personal physician on file with your employer in writing before the injury occurred (as is allowed in California, for example), you may be able to use your own doctor immediately. It's important to understand your state's rules before an injury occurs.

What happens if a workers' comp claim is denied?

If your claim is denied, you have options: 1. Request reconsideration: Ask the insurance company for a written explanation of the denial and provide any missing documentation. 2. File an appeal: Every state has a formal appeals process through its workers' compensation board or commission. 3. Request a hearing: A workers' compensation judge can review the facts and override the insurer's decision. 4. Hire an attorney: Workers' comp attorneys typically work on contingency (no upfront cost) and can significantly improve your chances of a successful appeal. Common reasons for denial include late reporting, insufficient medical evidence, disputes over whether the injury was work-related, and pre-existing condition arguments.

Does workers' comp cover part-time and seasonal employees?

In most states, yes — workers' compensation protections apply to all employees regardless of whether they are full-time, part-time, seasonal, or temporary. Independent contractors, however, are typically not covered (though misclassification of employees as contractors is a common and heavily scrutinized issue). Domestic workers, farm workers, and certain other categories may be excluded in some states. Business owners, corporate officers, and sole proprietors may be able to opt in or opt out of coverage depending on their state's rules.

Can an employee be fired for filing a workers' compensation claim?

No — it is illegal in all states to retaliate against an employee for filing a workers' compensation claim. Firing, demoting, reducing hours, or otherwise penalizing an employee for filing a claim is considered workers' comp retaliation and can expose the employer to significant legal liability. However, an employer can still legally terminate an employee for legitimate, non-retaliatory reasons (e.g., layoffs, misconduct) even if the employee has an open workers' comp claim. Employees who believe they were retaliated against should consult an employment attorney promptly.

Can an employee sue their employer in addition to filing a workers' comp claim?

Generally, no. Workers' compensation is considered the "exclusive remedy" — by providing workers' comp benefits, employers are typically protected from civil lawsuits by injured employees. However, there are notable exceptions. Employees may be able to sue if the employer intentionally caused the injury, or if a third party (not the employer) caused the injury (e.g., a defective piece of equipment made by another company). In those cases, employees may be able to pursue both workers' comp benefits and a third-party personal injury lawsuit.

How can employers reduce their workers' compensation costs?

Employers can take several proactive steps to manage and reduce workers' comp costs: • Implement a strong workplace safety program and conduct regular safety training • Establish a return-to-work program so injured employees can return to modified duties sooner • Report injuries promptly to the insurer to manage claims effectively • Work with your broker to ensure employees are correctly classified under the right job codes • Maintain a low Experience Modification Rate (EMR) by keeping claims frequency and severity down • Conduct regular safety audits and equipment inspections • Consider a drug-free workplace program • Review your policy annually to ensure accuracy of payroll figures and job classifications Disclaimer: This FAQ is for general informational purposes only and does not constitute legal or insurance advice. Workers' compensation laws vary significantly by state. Consult a licensed insurance professional or qualified attorney for guidance specific to your business and jurisdiction.

This FAQ is for informational purposes only and does not constitute legal or insurance advice. Coverage terms, exclusions, and availability vary by insurer and state. Consult a licensed insurance professional at The Firebird Agency for guidance specific to your situation.