Workers’ compensation, also referred to as workmans’ compensation or workers’ comp, is a type of insurance that pays benefits if you’re injured on the job. Workers’ comp insurance pays a portion of your wages and all approved medical expenses directly related to your injury.
Workers’ compensation is statutory, which means each state has its own laws requiring employers to provide their workers with insurance coverage. Therefore, requirements vary from state to state. They set out the duties of employers and rights of employees when an injury occurs.
It is not a mandatory requirement for all employers to carry workers’ comp insurance. Depending on the state, some smaller companies with a limited number of employees are exempt from having to provide coverage. Other employers may be exempt from state requirements because they have enough assets to provide intra-company insurance with benefits equal to, or better than those provided under the state’s workers’ compensation laws. These companies are referred to as self-certified.
In most situations, injured employees receive workers’ compensation insurance, no matter who was at fault for the injury. Because these workers comp benefits act as a type of insurance, they preclude the employee from suing his or her employer for the injuries covered.
This differs from state to state. States limit the length of time that you can receive temporary benefits for an injury. These limitations are also the range of three to seven years. There is generally no limit on the length of permanent disability benefits, except that some states terminate weekly benefits when the employee reaches age 65. Furthermore, Not all states provide for permanent partial disability benefits.