Importance Of Compensation Insurance To Our Workers

Why Employees Need To Have Workers’ Compensation Insurance

Most US States (if not all) require employers to buy an insurance policy to safeguard their compensation at work, especially if there’s a high risk of getting injured (or get ill) due to workplace exposure.

By definition, this insurance policy is a type of plan that covers the cost of medical, rehabilitation expenses, and lost wages due to sickness or injury while performing their responsibilities in the workplace.

But why employees need to have workers’ compensation insurance? And what are the benefits that a wage earner can expect once they purchase this kind of policy? Get to know the answers as we tackle this topic in today’s entry.


Workers’ Compensation Insurance Protects The Welfare Of Both The Employer And The Employee

The compensation insurance is necessary for many reasons, one of which is that it is governed by both local and national laws. In other words, any company that does not comply with this policy will be subjected to criminal and civil penalties.

Aside from that, here are the other reasons why employees are required to have a workmans’ compensation insurance:

person using forklift workers compensation insurance(For Employees):

  1. To protect the employees in times of accidents and sickness.
  2. To ensure that the employees will be paid during those days when they are absent because of injury or sickness.
  3. To cover medical expenses.
  4. To provide compensation due to permanent injuries.
  5. To provide benefits to surviving members of the family if the family is killed while doing work.


(For Employers):

  1. To protect the company from financial loss.
  2. To prevent employers from being financially liable in the event of employees’ injury or illness.
  3. To prevent civil and criminal liabilities.

How Will Employees Benefit From Compensation Insurance?

Legal Liability Coverage – This type of insurance policy covers the legal expenses of the employee who get sick or injured at work.

safety workers compensation insuranceOccupational Illnesses & Conditions – Illnesses that are directly linked to the employee’s line of work can greatly affect their productivity. And through this policy, the employee can now manage their condition to ensure efficiency.

Vocational Rehabilitation Expenses – This type of insurance also covers expenses in training for a new position if the employee gets injured at work and can no longer perform their previous responsibilities due to their injury.


Lost Wages Compensation – The policy will cover the employees’ income at the time that he or she is temporarily disabled.

Special Add-Ons In the Coverage – And lastly, the workers’ compensation insurance also provides coverage for employees who get injured in the events of terrorist attacks that happen during working hours.