Related Sponsors

What is workers� compensation?

Home » Small Business » Workers� Compensation » What is workers� compensation?

Workers� compensation, often referred to as workers� comp, is an insurance program that pays employees who have been injured on the job. Workers� comp is a state-run program, and it is almost universally required of businesses�only a few states do not require coverage, and only a few types of companies (i.e. businesses with five or less employees and businesses in a few specified industries) do not have to have a policy.

Workers� compensation is a state program, so the rules governing its practice vary from state to state; in any state, however, injury on the job is a broad category. In addition to injuries, Workers� compensation policies cover sickness that is a direct result of your occupation. In addition, these policies include injuries that happen over the course of many years at a specific job, injuries such as a strained back, carpal tunnel syndrome, and even lung disease.

Some states only offer workers� compensation through private insurance agencies while others only offer a state fund, and still others give companies a choice between private and government policies. In some cases, the insurance providers will assign a business to a risk pool, in which providers decide on policy types based on the determined risk of a certain job rather than on the previous number of injury claims. At other times, the state allows especially large and stable companies to serve as their own insurer. To get a full grasp of your state�s peculiarities, contact the state workers� compensation office and ask for more information.

Next Page: What is the process of filing of a workers� compensation claim and receiving benefits?

Related Workers� Compensation Articles