How Workers' Comp Works

Workers Comp 101

Workers' compensation insurance can seem complicated, but it's a powerful tool to support your business and your employees. Think of it as a safety net. If someone on your team gets hurt at work, this insurance is there to help them recover and get back on their feet – and it helps you avoid costly expenses. Let's break down how it works and why it's so important.

Step 1: Something Happens

Unfortunately, accidents and illnesses can happen in any workplace. If an employee gets hurt or sick on the job, your first priority is getting them the care they need.

  • Employees: If you're injured, report it to your employer right away, even if it seems minor. 
  • Employers: You'll file a workers’ comp claim with your insurance company as soon as you learn about the injury. The amount of time you have to report the injury varies by state.

Step 2: Getting Treatment

You want your employees to get the best care possible, which is why workers' comp often lets you recommend doctors you trust.

  • In emergencies, employees should seek treatment immediately.
  • In non-emergencies, employees should ask you for a list of approved doctors. In some states, the injured worker can use a medical provider of their choice. 

Step 3: Returning to Work

If their doctor approves, an injured employee might be able to come back to work with some modified duties while they heal. This is great for everyone – they stay productive and you get support!

Step 4: Ongoing Care and Closure

The insurance company will cover medical treatment until the employee is fully recovered (doctors call this "maximum medical improvement"). Once that happens, the claim can officially close.

Who Needs Workers' Comp?

Regulations vary widely from state to state, but most businesses are required to maintain workers’ comp coverage if they have one or more employees. Even if it’s not required by law, workers’ comp makes sense to protect your employees and your business. 

There are only a few exceptions to the requirement. Curious if you're exempt? Find out the guidelines in your state. 

What Does It Cover?

Workers' comp is designed to be comprehensive:

  • Medical bills and ongoing treatment
  • Lost wages if an employee can't work
  • Support for permanent disabilities 
  • Benefits for the employee's family if the worst happens

Benefits for Everyone

Workers’ comp coverage provides peace of mind for you and your employees. 

  • Employees: Less financial stress, access to quality care, and protection if they're seriously injured.
  • Employers: No worries about huge medical bills or lawsuits. You can focus on what you do best – running your business!

The Cost of Workers' Comp

How much you pay for workers’ comp coverage depends on a variety of factors, including:

  • Your industry
  • Your company's safety record
  • Your total payroll

Even when your top priority is taking care of your employees, it's normal to want to keep your workers’ comp costs low. Here are some ways to get the best premiums:

A great workplace safety program will decrease the frequency and severity of injuries at your workplace, which can lower your rates.

Workers’ compensation-specific medical treatment, billing and documentation requirements are unique and can be complex, so choosing providers who understand the process can make everything run much more smoothly.

The Bottom Line

In most states, workers' comp is mandated by law. But remember the big picture: it helps you protect you and the hard-working people who make your business successful. And that's a win for everyone!

Coverage built to last

Find peace of mind with business protection that puts you first.

Media inquiries

For all media inquiries, contact Liz Johnson, Public Relations Director:

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Frequently Asked Questions

Find answers to commonly asked questions about workers’ compensation.

What is workers' compensation?
Workers’ compensation is a form of insurance that benefits employers and employees in the case of a work-related injury or illness.
Who is required to carry workers’ comp?
Workers’ compensation laws vary by state, so it’s important to know your state’s requirements. In many states, workers’ compensation is required for employers with one or more employees.
What benefits are available?
Workers’ compensation can include medical care, lost wages and death benefits. Workers' compensation coverage may also safeguard businesses from legal action if an employee experiences a work-related injury or illness.
Who pays for workers’ comp?
The employer is responsible for purchasing and maintaining workers’ compensation coverage.
How much does workers’ compensation insurance cost?
Workers’ compensation premiums are based on factors such as payroll, industry and claims history, so premiums vary between businesses.