Workers' Compensation is an insurance coverage that helps protect businesses and their employees from the resulting financial losses when a worker is injured or contracts an illness on the job. It helps cover the costs of the sick or injured employee’s lost wages and medical expenses. In addition to wage replacement and medical costs, workers’ comp can also help cover the costs of vocational rehab. In the event of an employee’s death, workers’ comp even provides death benefits to help cover funeral expenses and support payments to dependents.
In the United States, the first workers’ compensation system started in the early 1900s as a result of the “muckrakers” literary movement. The muckrakers’ stories exposed the appalling and dangerous conditions many factory employees were working under which eventually spearheaded social change.
Today, workers’ comp insurance helps protect workers from the potentially devastating costs of work related injuries and illnesses and can help protect employers from the potentially crippling costs of employee claims.
Every person working for another person, group of people, firm, or corporation must be covered by Workers’ Comp insurance. This includes people working under any type of contract, whether it is expressed or implied. This coverage requirement extends to aliens and minors who are lawfully and unlawfully employed. Licensed real estate brokers, musical theater performers, and temporary workers are exempt. Most independent contractors are exempt as well, with the exception of construction workers.