Workers’ compensation insurance is important to have to protect your business. Therefore, it’s important to know exactly what workers’ compensation covers. If you are a contractor or business owner in the Tri-Cities, it is very important for you to understand how workers’ compensation works and how your employees are covered.
Workers’ comp basically covers four things: lost wages, a death benefit, lump sum settlement, and medical bills.
What Workers' Compensation Insurance Covers
The first thing workers’ compensation insurance covers is lost wages. To figure those lost wages, the insurance agency will look at your last 52 weeks and take your average weekly wage. You are then paid on that basis. The average weekly wage calculation does include some things such as stipends and food and lodging reimbursements. You need to keep that in mind if you have a workers’ compensation claim to make sure you are getting the proper amount of money. It is generally 2/3 of your average weekly, non-taxed wage.
Secondly, workers’ compensation pays a death benefit. If you die, it will pay that death benefit to your heirs. That death benefit will be set by the state and is based on your income among other factors.
Next, it will provide you with a lump sum settlement. If you are permanently disabled, whether totally or partially, there will be a schedule for what you will get paid based on what you injured and how badly you are injured. That money will allow you to take care of yourself because of your injury for the rest of your life. So, if you lose a pinky, there will give you a certain amount of money for that, and if you lose a hand, they will give you another amount for that.
Finally, workers’ compensation insurance will cover all your medical bills, with no deductible. Some companies will try to negotiate where they don’t pay any future medical bills. In some situations, they can legally do that and in others they cannot. Sometimes it makes sense to get an attorney to help you but you may not need one every time—that will be a case-by-case decision.