Like most states, Kentucky requires nearly all businesses to buy workers’ compensation insurance. This is an important part of your risk management program, not to mention an essential benefit for almost any employee who gets injured on the job. Without it, you could be opening your business up to significant liabilities and legal issues.

Still, many new business owners have questions about how workers’ compensation works, and why they need it in the first place. Let’s take a closer look at the basics of this benefit.

What is workers’ compensation?

If someone gets injured or sick because of their work, then they might not be able to work, earn an income and pay their bills. Because these injuries occurred on the job, the employer itself might be liable for the employee’s losses (even though the injury might have been an accident). Workers’ compensation is a form of insurance benefit that will provide financial support to injured employees during their recovery, on behalf of the business.

What does workers’ compensation pay?

Workers’ compensation insurance can pay for any number of employee injuries, including injuries caused by repetitive motion and exposure to toxic substances. Some of the benefits provides include:

• Supplementary income
• Coverage for medical bills (including lifetime medical bills)
• Disability benefits
• Vocational rehabilitation

Depending on the severity of the injury, workers’ compensation will help the injured employee either during the period of their recovery or for the rest of their lives. Some policies even pay death benefits to an employee’s survivors if that person dies as a result of their injuries.

Am I required to buy workers’ compensation insurance?

By law, most Kentucky employers with at least one employee must buy workers’ compensation insurance. There are certain businesses that are exceptions. However, full-time, part-time, temporary, probational, temporary and minor employees are all counted towards the one-employee rule.

How does workers’ compensation help employers?

Though the primary financial support provided by a workers’ compensation insurance policy is paid to the injured employee, it is still a critical benefit for the employer, too.

By having workers’ compensation insurance, you avoid the risk of ever having to pay for an injured employee’s claims out of your own pocket. Given the high costs often associated with occupational injuries, it is better to be able to rely on your workers’ compensation policy to pay, rather than to attempt to pay out of pocket.

Additionally, by agreeing to take workers’ compensation benefits, an employee agrees not to sue the employer over their injury. Therefore, workers’ compensation insurance will help you avoid liability for an occupational injury while still meeting your obligation to the employee.

Also Read: Recognizing And Preventing Injury Liability Risks

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