Workers’ compensation insurance, the nation’s oldest social insurance, protects employees and employers if an employee is injured while on the job. If employees get hurt or are sick because of work, an employer must pay workers’ compensation benefits, and those benefits are typically paid through insurance. Because this insurance affects nearly all California employers and employees, and it is often subject to disputes and litigation, it is important to understand what the insurance is, who must provide it, and how it works.
Why Does Workers Comp Insurance Exist?
First, workers’ compensation insurance protects employees because it provides medical care and salary compensation to an employee who is injured, while at work, irrespective of whose fault it is. For example, if an employee slips and falls on a certain type of floor mat and is injured, the insurance also protects the employer from lawsuits by the employee if the employee sues someone else, such as the manufacturer of the floor mat, and that third party manufacturer attempts to hold the employer responsible. The state’s Department of Industrial Relations, Division of Workers’ Compensation, monitors administration of workers’ compensation claims and payment of those claims from insurance companies.
Second, all California employers, even if they have just one employee, must provide workers’ compensation insurance. Employers must purchase workers’ compensation insurance from a licensed insurance company, through the state, or they may self-insure. Self-insurance requires state approval, and the employer must meet certain financial tests as well. Even out-of-state employers may need to carry workers’ compensation insurance for employees who do a majority of work in California. The insurance protects against injuries, like the fall in a laboratory described above, or repeated exposure to a condition that causes injury, such as wrist pain following repetitive movement. Insurance provides basic benefits, temporary and permanent disability benefits, death benefits, and benefits related to returning to work. Workers’ compensation insurance premiums are not regulated by the state, and rates can vary from carrier to carrier.
Third, workers’ compensation requires prompt reporting of accidents or injuries. An employee who does not report the injury within 30 days, and whose delay prevents the employer from fully investigating the injury, may lose his or her right to compensation. State law requires employers to keep records of accidents and to post a “notice to employees” sign that provides information about workers’ compensation coverage and where to get medical care for work injuries. Further, an employee handbook or other employee materials should explain to the employee how to report an injury. These expectations should also be conveyed at meetings such as safety procedure reviews.
For more information on workers comp insurance in California, contact attorney Drew E. Pomerance today.