There are plenty of horror stories about workers compensation insurance providing coverage for certain individuals or types of injury related to a job but not others. For instance, there have been purported instances where PTSD related to workplace-related trauma have not been covered.

What should you, as an employer, know about the types of claims that are covered? Conversely, what should you know about the types of claims not covered by the workers compensation insurance you provide for your employees?

What Is Workers Compensation Insurance?

Workers compensation insurance is a temporary benefit designed to ensure that a percentage of an injured employee's compensation is paid while recuperating or recovering from a work-related illness or injury. The benefit helps the employee meet some of their essential expenses while off the job, with the goal of providing an incentive to return to the job once recovery has taken place. The amount payable varies from state-to-state and is provided by funds managed by the state and is determined by both your industry classification and an employee's payroll classification.

Claims Typically Paid By Workers Compensation Insurance

The broad category of claims paid by your workers compensation insurance include those resulting from injury or illness resulting from an employee's job-related activities and performance. The benefits payable to the employee under such a circumstance include:

• Payment of a percentage of loss wages for a limited period
• Medical expenses incurred by the employee related to the work-related injury or illness
• In the case of an injury that is permanent, a benefit related to the value of the loss
• In the case of death resulting from a job-related injury or illness, a death benefit payable to the employee's beneficiaries

Claims Not Paid By Workers Compensation Insurance

Typically, injury and illness which occurs away from the job are not covered by workers compensation insurance. Yet, this general statement may be challenged by certain situations. One of these might be as that of an employee contracting a deadly virus while performing essential duties on the job from contact with another employee, customer or other individual who comes in contact with your employee.

Keep in mind that this example is subject to legal interpretation. The extent of your liability under workers compensation insurance has not yet been challenged by a situation such as the COVID-19 outbreak.

Claims made by employees for benefits under workers compensation insurance that have not been paid include:

• Employees of employers with less than 5 employees (depending on the state)
• Employees of the federal government (this is covered under separate federal workers compensation insurance program)
• Employee's commute time to and from work

As an employer, it is important to encourage safe practices, particularly around dangerous machines or areas. This can help reduce the likelihood of injury or illness on the job. By installing safety stations for washing hands and eyes and requiring sick employees to stay home, you can reduce your risk — and the possibility of a workers compensation insurance claim being made.

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