What are the Types of Workers' Compensation Insurance?

It is the employer's responsibility to offer a safe environment to their employees. However, even after following safety protocols, accidents do happen at worksites. This is why employers invest in a workmen's compensation policy, which offers financial aid to employees who experience work-related injuries.

This insurance policy is also crucial for businesses and organisations as it protects the employer's financial and legal liability in case of job-related accidents or injuries.

Depending on the organisation's needs, there are different types of worker's compensation benefits available.

Wage or Salary Replacement

One of the main types of worker's compensation insurance is salary or wage replacement. It is classified into four subcategories based on the injury and the worker's ability to earn.

Temporary Total Disability: In this worker’s compensation insurance, a salary replacement benefit is provided to workers who are unable to work due to illness or injury but can return to work after some time.

Temporary Partial Disability: In this type of subcategory, salary benefit is provided to workers who return to work but are unable to work at total capacity due to injury.

Permanent Total Disability: This is another type of subcategory in which wage replacement benefits are provided to workers who are unable to return to work due to injury or illness leading to permanent disability caused at the work site.

Permanent Partial Disability: In this subcategory, a worker is able to return to work after the accident but will not be able to work at full capacity.

Medical Treatment

In this type of worker compensation insurance benefit, the insurance provider will cover the medical cost of the employee or worker for a worksite-related injury or illness. These may include:**

• Doctor's appointment fees.

• Emergency care or treatment cost

• Recover equipment cost

• Surgery cost

• Therapy and rehabilitation cost

• Medication cost

Vocational Rehabilitation

This is another type of worker compensation policy in which the injured employee needs assistance returning to work.

In this type of benefit, the employer and insurance company cover the cost of therapy and medical care, which helps injured workers cope with the illness or injury.

Many insurance providers also cover training and other program costs that help employees get back to work.

Funeral and Death Service

If due to a work site accident or illness, an injured employee loses their life. As per the worker compensation insurance, the beneficiary or family will get the financial aid.

The financial aid helps the family to cover the funeral or death service expenses. This type of monetary compensation, given to immediate family members, includes:**

• Spouse

• Elderly parents

• Children

When it comes to worker’s compensation insurance plan premiums, many factors play a crucial role. The premium of the plan is decided by accounting for various factors such as:

• Nature of industry

• Salary of employees

• Number of workers

• Safety protocols or standards followed by the employer

• Classification of industry

• Risk location

• Previous claim experience

The insurance provider considers all these factors while deciding the premium and the employer pays the worker compensation insurance premium. Further, the plan's premium may vary at the time of policy renewal depending on the change in the number of workers, claim history, and more.

Some of the common exclusions under the worker's compensation insurance are:

• Accidents or injuries caused to workers under the influence of intoxicating substances such as alcohol, drugs, etc.

• All non-fatal injuries are not covered under the worker's compensation insurance.

• Employees or workers who are not considered workmen as per the Workmen Compensation Act.

• Any psychiatric illness or disease is not covered under the workers's compensation insurance.

• Any injury or illness that doesn't cause partial disability of more than 3 days is not covered under the insurance plan

Workmen compensation policy is essential for employers as it helps avoid any additional expenses resulting from workplace injuries or illnesses among employees. In such cases, the insurance provider incurs all the expenses.

Further, as per the law, in case of an employee’s unfortunate event of death or permanent disability on the job site or tenure due to a direct result of employment, the employer is liable to pay compensation.

The insurance provider covers the monetary compensation in such a case. Due to these reasons, many businesses or organisations invest in workmen compensation policies online.

When it comes to purchasing insurance plans, Tata AIG is a reputed name that offers various SME insurance policies such as workers' compensation, fire and burglary insurance and more, catering to business-specific needs.

Visit our website to learn more about workers' compensation insurance.

Unfortunate incidents can occur anywhere, even in a worksite, without any prior warning. Whether you run a high-risk business prone to work-related injuries or an office with a desk job, assessing the worker compensation insurance needs is essential.

It is best to research the different types of workers' compensation policies and buy the plan that fits your business requirements. However, before purchasing the plan, it is essential to understand the terms and conditions of the plan thoroughly.

Is workers's compensation and employee compensation the same?

Yes, workers's compensation is also referred to as employee compensation. Under this, the employer must cover the financial and health care of the injured worker or employee due to worksite-related accidents.

What type of worker's compensation is the most common?

Medical care cost, salary replacement, vocational rehabilitation, etc., are the most common types of worker compensation benefits.

Who is exempt from workers' compensation?

Contractors and freelancers or any workers who are not salaried employees are exempt from receiving worker's compensation.