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All About Workers Compensation Insurance
Every employer is required to provide insurance to protect their employees in case of an on-the-job injury. This type of insurance is known as Workers Compensation Insurance. It protects the employer from litigation in case of an accident, and it sees that the employee's needs are met in the event of an accident.
Worker's comp is set up in a way that the injured employee does not have to go to court and fight to prove negligence on the part of his employer in an accident he suffered while on the job. He gives up that right, and in return, his medical bills are taken care of, he receives compensation for lost wages and provision for his needs in case of a permanent disability. If he loses his life at work, his family is also taken care of.
Texas is the only state in the nation that gives its employers the opportunity to opt out of this type of insurance. If there is a work-related accident, the person must prove before the court that the owner of the business was negligent in some way concerning safety on the job. Often times this type of law suit results in the injured person receiving more reimbursement.
Employer requirements differ from state to state. Texas does not require it, some states require it of all business owners and other states only require it for businesses that have over a certain number of employees. It is very important to know what the laws are in the state your business is located in.
This type of law was a result of the trade unions and the industrial societies worldwide. It gave the workers a sense of security in their workplace, plus it gave them a better working environment. The employers gained the protection from workers who might decide to take them to court over an accident.
This particular law may be disadvantageous to both the employer and the employee in certain ways. The employer automatically incurs higher costs when he agrees to provide his workers with workers comp. He may also face certain workers making numerous false claims just to take advantage of the system.
Workman's comp is not a complete insurance policy in the event of an injury. Employers can actually be negligent in their operations since their employees do not have the right to sue them, making the working environment less safe. This law does little to better the relationship between the employer and his workers.
One big advantage to opting in to this type of insurance is that it limits the employer's responsibility to just the type of accidents covered by state law. He does not have to worry about an employee suing him for his personal assets. He has no right to try and take everything his employer owns.
The amount and type of benefits that the employer pays is limited according to state law requirements. This makes his costs more predictable and makes it easier for him to plan out his finances and any disability responsibilities he may have in the future.
State programs require numerous kinds of forms and procedures that must be filled out and followed. This increases considerably the amount of work that falls on the employer's shoulders. If by some chance the claims are rejected, the employer will have wasted his valuable time. It often makes more sense to pay a company who works with claims to do the claims for you.