Workers compensation insurance is basically an insurance policy. It protects employees if they become sick or injured while carrying out their duties of a job. Workers compensation insurance coverage is mandatory for all employers who have one or more employees, part time or full time, including their family members. The reason worker’s compensation is so named because workmen, such as construction workers or factory workers are much prone to severe injuries because of the nature of their jobs than employees in other sectors.

What is workers compensation insurance?

Worker’s compensation insurance is a monetary benefit given to employees who are disabled or injured on the job in order to prevent the employee from filing a lawsuit against the employer. In general, this monetary benefit covers all medical expenses related to the injury or disease, additional expenses for permanent injuries, and for the money lost while not being able to work due to the injury.

Employers are required by law to pay workers compensation insurance premium monthly or annually, to provide the insurance coverage for their employees. Coverage includes work associated sickness, illnesses, falls, and other accidents in the workplace.

Worker’s insurance does not cover just the medical expenses. It also provides wage replacement for the worker due to an on the job injury or accident. Each territory in Australia has its own regulation and its own governing body. Based on this, the injured worker may get up to 2/3 of his/her actual wages, until they are able to return to work.

Types of workers’ compensation insurance benefits:

Workers’ compensation benefits include medical benefits, income benefits, death benefits, and burial benefits.

a. Medical benefits: Medical benefits offer monetary benefits to pay for the medical care to treat the employee suffering from work related injuries. Although the details of what is covered vary in each territory, in general, workers compensation insurance covers things such as doctor expenses, medicines, and surgeries. In some cases, it may also cover services like pain therapy, acupuncture, and counseling. For workers who need equipment’s like special vehicle or a wheelchair to help to deal with their injury, workers compensation insurance will likely cover that costs as well.

b. Income benefits: Income benefits provide monetary benefits to pay the employees a portion of their lost wages because of the work related injury. Income benefits may include LIBs (lifetime income benefits), TIBs (temporary income benefits), SIBs (supplemental income benefits) and IIBs (impairment income benefits).

c. Death benefits: Death benefits pay a portion of the lost wages to the worker’s family killed on the job

d. Burial benefits: Burial benefits provides monetary benefits to the deceased employee’s funeral expenses to his/her family member or to the person who paid the funeral expenses.

What does and what doesn’t Workers compensation policy cover?

As mentioned above, workers compensation insurance covers all work related injuries or illnesses of the employee. However, the illnesses or injuries need not occur in the workplace. Any job related injury or illness is covered under this policy.

However, the following illnesses or injuries that occur in the workplace is not covered under the policy. This includes

a. Self-inflicted injuries

b. Injuries caused by drug or alcohol intoxication

c. Felony-related injuries

d. Injuries occurred due to fighting between employees

e. Injuries claimed after the termination of the employee

f. Injuries resulting from a violation or horseplay of company policy

g. Injuries that occur to an independent contractor

Employer’s obligation under Worker’s compensation insurance:

Employers have a number of responsibilities such as

a. To carry worker’s compensation insurance

b. Post notices that contain important information about employee’s legal rights to get medical benefits in case of any injury on the job.

c. Provide claim forms to employees within 24 hours of receiving notice of the injury

How to obtain worker’s compensation insurance:

The individual territories in Australia dictate workers compensation laws for their employers. However, it is mandatory for all employers to obtain worker’s compensation insurance to cover their workers for on the job injuries. The cost, laws, and penalties for not having the insurance policy varies widely from one territory to another.

a. Research: Consult the government website to learn about the specific requirements that should be followed for worker’s compensation insurance in your locality. Conduct a research on the laws of the state and follow them where operations are based.

b. Company details:

Collect all relevant information related to the specific business operation such as company description, the number of employees working in the company, operations manual or employee handbook, checklist of the various safety practices and procedures followed, and pictures of the facility. Prepare a package of information that can be used by potential insurance providers to prepare the quote for the coverage. The accident history of the company should also be documented.

c. Find an agent:

Contact an agent who has a certain experience working with worker’s compensation coverage. Work with the agent to find the best policy package that best suits your company requirements. On the other hand, insurance coverage quotes can be obtained online too.

d. Shop around and find the best insurance coverage your business requirements:

Workers compensation insurance policies, like any other insurance policy can be obtained from private insurance carriers. Since, all insurance carriers are not equal, it is important that you shop around for the best insurance coverage at the best prices. Know that , each insurance provider will be using different factors to calculate the worker’s compensation coverage. Many insurance providers will want to inspect the factory premises before placing the quote for coverage, so, it is best to audit the facility in advance for possible workplace hazards.

The level of coverage that is required for a particular business often depends on the type of industry it belongs to and the quantity of staff working there. For instance, a factory would typically require more coverage than a regular office because of the increased risk involved in such types of job. Try to minimize the premium payments by purchasing a higher deductible policy.

e. Make the purchase:

Finally, review the calculations made by the insurance provider and purchase the one that best suits your requirements. Follow any underwriting requirements, and give updates whenever employees leave the organization or new employees are added to your organization.

Will Stevens is a legal assistant from Brisbane, Australia.