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5 Things Workers Compensation Covers, and Doesn’t!

5 Things Workers Compensation Covers, and Doesn’t!


In part 1 of our Workers Compensation series, we touched on what exactly Workers Comp is, how it is sourced and why its needed. Today we look at 5 things that Workers Comp can cover….and a few things that it doesn’t exactly cover!

So what exactly can Workers’ Comp do? How can it protect your business as well as your employees? Let’s take a look at five important benefits this policy offers.

1. Medical Costs to Treat Immediate Injuries and Illnesses

A business should take every feasible measure to prevent workplace injuries and illnesses, but sometimes, all the safety training in the world won’t prevent a sudden accident.

When an employee is injured and needs medical attention, the employer can be (and usually is) responsible for covering the cost. Workers’ Comp steps in to pay for those emergency room visits, ambulance rides, and other medical bills.

2. Missed Wages

So what happens when your employee has an occupational accident and can’t work for a while? Employment laws require you to pay for at least a portion of their missed wages while they recover. This can mean weeks of pay on top of finding, training, and paying for a temporary replacement worker.  All told, the lost work can be a huge expense. Workers Comp covers these missed wages and reduce your financial burden.

3. Ongoing Care

Sometimes, a work injury or illness is so severe that the employee needs ongoing care, such as surgery, rehabilitation, or appointments with specialists. Even if that employee never returns to work, your business may be responsible for the cost of their care. In the eyes of the law, it was your duty to ensure a safe working environment.

Workers Comp policies offer this exact ongoing coverage in the unfortunate instance of an employee requiring ongoing treatment.

4. Funeral Costs and Death Benefits

If a work tragedy ends with an employee’s death, Workers Comp Insurance can provide funds for funeral expenses, allowing you, your staff, and the employee’s family to grieve without stressing about the service.

Policies even provide coverage for death benefits, such as support payments to the employee’s dependants.  Offering these benefits can help you keep quality workers if you operate in a high-risk industry.

5. Legal Costs if an Employee Sues You Over the Injury

If an employee is hurt at work and thinks your business is to blame, you may face a lawsuit soon after the injury.  Unfortunately, the cost of a lawsuit can far exceed medical bills and treatment costs, depending on how the court rules.

Luckily, your Workers Comp policy has Common Law Liability up to $50million, so your insurance company can help you pay for attorney fees, court costs, and judgements or settlements.

And What Doesn’t Workers Compensation Provide for?

1. Wages for a Replacement Employee

When a valuable employee is the victim of a workplace accident, they might be off of work for a while. A hurt back is enough to keep a person home for a few days, and you might manage without the employee for that time. But severe injuries can take months to recover from, and the world doesn’t stop turning for an injured employee.

In the interim, you may need to hire a temporary replacement worker to keep your business moving. Keep in mind, though, that Workers’ Comp doesn’t cover the replacement employee’s wages. That responsibility is on you.

2. Funds to Improve Workplace Safety

As a business owner, it’s your responsibility to make a safe work environment for your employees, and that means you must mitigate dangerous conditions before they lead to injuries. For example, you may need to invest in safety equipment and training to ensure your employees have the gear and skills to do their work safely.

Even if an employee is injured in an accident, Workers Comp doesn’t provide funds for you to improve workplace safety. It’s best to take care of safety issues proactively to avoid a claim from the outset.

3. OSHA Penalties

You’re responsible for maintaining workplace safety, but Occ Health and Safety is there to make sure you’re following through on that responsibility.  Failure to follow safety standards can result in hefty penalties if your business is inspected by WorkCover or OHS inspectors.  Workers Comp doesn’t offer any coverage for paying those fines, even if an OSHA violation caused the employee injury.

4. Third-Party Damages

In especially unfortunate circumstances, a third party, such as a customer, client, or passerby, could get caught in the same accident that injures your employee. Maybe an out-of-control backhoe swings its shovel into a random car. Maybe a heavy box falls on a customer when the employee carrying it slips on a puddle.

In these instances, Workers Comp only covers the costs associated with your employee’s injuries. The good news though is that your Business Public Liability policy will step in and cover the third party’s injuries.  Public Liability can cover their medical bills and pay for your legal expenses if they try to sue you over the injury.

5. Get-Well-Soon Cards


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