Workers’ compensation, often known as workman’s compensation, is a form of insurance providing wage replacement and medical benefits to employees injured in the course of employment. Here’s a brief overview of how it works and its importance:

Purpose of Workers’ Compensation: The primary goal of workers’ compensation insurance is to ensure that employees who are injured or become ill due to their job receive necessary medical treatment, ongoing care, and compensation for lost wages. It’s a no-fault system, meaning that employees receive benefits without the need to prove fault, thereby avoiding litigation12.

Coverage Details: Workers’ compensation covers medical expenses, rehabilitation costs, and lost wages for employees who suffer work-related injuries or illnesses. It may also provide death benefits to the families of employees who die as a result of their job12.

Legal Requirement: In most states, businesses are required to have workers’ compensation insurance, even if they have only one employee. The specific requirements can vary by state, and there are exceptions based on the type of work or the number of employees1.

Benefits for Employers and Employees: For employers, workers’ compensation insurance helps protect against lawsuits by injured employees. For employees, it provides a safety net that helps them recover and return to work without the added stress of financial hardship due to injury or illness2.

Exclusions: While workers’ compensation provides broad coverage, it generally does not cover injuries that occur due to an employee’s intoxication, intentional self-harm, or those sustained during a fight initiated by the employee2.

Workers’ compensation is a crucial aspect of employment that benefits both the employer and the employee, ensuring that the aftermath of workplace accidents is handled fairly and responsibly.