Why is it Important for Employers to Obtain Workers Compensation Insurance?

Why is it Important for Employers to Obtain Workers Compensation Insurance?

Workers compensation insurance is one of the most important insurances a business owner can buy. It is even legally required for businesses in most States of the United States. In many circumstances and lines of work, employees have to work in dire circumstances. They might risk facing grievous injuries, disease and even death.

Importance of Workers Compensation Insurance
  • Construction workers usually tend to face a lot of risks. They can fall down from a high rise building or have something fall down on them. Heavy machinery can also make the conditions more dangerous.
  • Journalists some times work in overseas assignments where they have to cover wars and epidemics. They risk their lives for the sake of their jobs.
  • There are miners who work deep underground to dig up the bounties of earth. They risk being buried or injured due to cave-ins or mechanical failures.
  • A biochemist might contract the disease while working on the cure.

All such jobs have the danger in common. That is why the Workers Compensation Insurance has such importance in all circles of employment. This is a policy which protects the employees under the mandatory state laws. It also provides medical care to those who are injured or contract a disease on the job. It provides death, disability and rehabilitation benefits for the workers who are injured or killed on the job.

The Workers Compensation Insurance allows the benefits to be paid directly to the suffering worker, or their family regardless of the liability. Workers compensation coverage premiums are dependent upon the employer’s payroll and the type of duties their employees perform.

Benefits of Workers Compensation Insurance
  • Workers compensation insurance protects the employees under their respective state laws. In spite of minor differences, all such policies are essentially the same.
  • It provides medical care as well as death, disability, and rehabilitation benefits for workers.
  • Typically, the benefits of worker’s compensation are awarded on a no-fault basis.
  • Premiums are generally dependent upon a number of factors. Two of them are the employer’s payroll and the type of duties performed by their employees.
Understanding Worker’s Compensation Insurance

It is possible for an employee to suffer injury, disability or death on the job. In such cases, the employee or family will be entitled to the workers compensation fund. They will receive several benefits from said fund. Such as, medical care, compensation for lost wages, rehabilitation cost and death benefits etc.

Workers compensation insurance awards benefits to the employees on a no-fault basis, as long as employee is not under influence. The employees are required to submit a drug test to ensure they were under no influence. There are many compensation cases which award partial reimbursement of lost wages or death benefits to a dead employee’s dependents.


Workers compensation insurance satisfies the legal requirements of the state. It compensates the employees for medical bills, other healthcare expenses and lost wages. The payments are typically made based on the pre-determined set of policies in the insurance agreement. The expenses are also accordingly paid as they are calculated.

Caution for the Employers

There are no defined policy limits in a workers compensation insurance. The insurer is required to pay all benefits required by the law in the respective state. Yet, the state can still hold employer responsible for payments made that exceed the regular benefits dictated by the policy. The employer is usually held responsible for such payments for one or more of the following reasons;

  • Willful Misconduct
  • Knowing Employment of Workers in Violation of the Law
  • Failure in Compliance with the Regulations
  • Discharge, Coercion or Discrimination against employee in Violation of the Law

The employer will reimburse the insurer for any payments made under the pretenses of above-mentioned violations.

Bottom Line

Worker’s Compensation is legally mandated in majority of the states in the United States of America and also one of the chief significant expenses for most employers. Employers might be inclined to pay more if the company has had a certain number of previous claims. Or if their employees have occupations that are considered reasonably dangerous and hazardous to health.

Get Access to Excellent Workers Compensation Insurance Policy for your Company

Workers compensation insurance is something that every business must acquire. It does not matter whether there is a high risk in work environment, or the employees work inside safe cubicles. Every business owner must realize its importance from the economical, legal and moral perspective. You must work with a competent insurance broker to analyze the risks associated with the job. They must assess the work conditions and all of the workers needs for potential compensation.

If you are unsure of how to go about doing this task, do not hesitate to contact SGA Financial Inc. We provide some of the best insurance deals in the market to some of the most prestigious business organizations. Insurance? We have worked hard to be recognized as among the top insurance providers in the state of Texas. Learn more about your industry, the associated risks and the pertaining laws with our help. We are here for you.