Understanding Workers’ Compensation: What It Covers and How It Protects Your Business
October 3, 2024

Workers’ compensation, or “workers’ comp,” provides benefits to employees injured or ill due to a work-related incident. It covers medical costs, healthcare benefits, lost wages, disability pay and retraining. While mandated by state governments, requirements vary by state.
What Does Workers’ Compensation Cover?
Workers’ comp helps employees unable to work by providing benefits that may include:
- Medical expenses from work-related injuries or illness, such as hospital visits and emergency surgeries.
- Mental health coverage for conditions like depression or anxiety.
- PTSD coverage for first responders in select states.
- Partial wage replacement (typically up to two-thirds) for time off due to injury or illness.
- Disability benefits for temporary disability or permanent disability.
- Ongoing care, such as physical therapy.
- Funeral and survivor benefits if a worker dies from employment-related causes.
Workers’ Compensation Exclusions
While workers’ comp generally covers all employees regardless of hours worked, some exclusions apply, depending on the state:
- Commuting: Coverage typically excludes travel to and from work unless the employee is in a company vehicle or a traveling role.
- Intoxication: Many states deny coverage if the injury involved intoxication.
- Workplace fights: Injuries during fights may not be covered.
Exclusion apply by profession, as in the Independent Contractor exception. In most states, only regular employees are eligible for workers’ compensation; independent contractors are not.
How Does Workers’ Comp Benefit Your Business?
Workers’ comp benefits both your business and employees by:
- Reducing out-of-pocket costs for medical expenses, lost wages, and funeral costs.
- Covering partial wages and care costs during extended absences.
- Providing coverage regardless of fault in workplace accidents.
Special Considerations
- Workers’ comp laws usually prevent employees from suing their employers for a work-related injury or illnesses.
- Workers’ comp is different from disability insurance and unemployment benefits.
- Employers can dispute claims, which the Workers’ Compensation Board may resolve.
- Workers’ comp benefits are generally not taxable, except in cases where the employee also receives Social Security benefits, such as Social Security Disability or Supplemental Security Income.
Who Pays for Workers’ Compensation Insurance?
Employers pay workers’ compensation premiums. Unlike Social Security, there is no payroll deduction for workers’ comp benefits.
In Conclusion
Every state except Texas mandates workers’ comp, though requirements vary. Contractors are typically not covered, and certain professions may be exempt. For more information on your coverage options, contact your Robertson Ryan Agent or get in touch with us today to discuss your business’s unique needs.