Does Your Company Need Workers’ Compensation Insurance?

Under the workers’ compensation system, employers are required to purchase insurance that provides benefits to employees who suffer work-related injuries and illnesses. The system strikes a compromise between employers and employees: Employees get benefits regardless of fault. In return, employers get protection from lawsuits by injured employees who want to be awarded money damages for pain and suffering or mental anguish.

Amanda Yenerall, an attorney with Stewart, Melvin & Frost, specializes in worker’s compensation law, representing employers, insurers and third-party administrators. Workers’ compensation law varies from state-to-state. Amanda joins us to talk about the requirements in the state of Georgia.

Question: Do all business owners in Georgia need Workers’ Compensation Insurance?

Amanda: If you regularly employ three or more persons in your Georgia business, you are required to provide the benefits. This includes part-time employees if they work on a regular basis such as employees who only work on the weekend.

The program is operated at the state level. In Georgia, our workers’ comp system is administered by the State Board of Workers Compensation. In most states, like Georgia, businesses are required to participate in the worker’s comp system, while a few states allow businesses to opt out in exchange for giving up some legal protection.

Question: What if an employer does not carry Workers’ Comp Insurance?

Amanda: Employers need to understand that if they don’t carry workers’ comp insurance, there can be fines levied by the state for failure to carry workers’ compensation insurance. Also, according to the law, an employer found by the court to have refused or willfully neglected to have workers’ compensation insurance shall be guilty of a misdemeanor.

Finally, all employees must be covered by workers’ comp insurance. But there are certain classifications of employees that are excluded such as business owners, independent contractors, farm laborers, domestic servants, and railroad workers (who are covered under federal law).

Question: What does worker’s comp cover?

Amanda: Workers’ compensation insurance covers any personal injury or illness that is work-related. The injury can occur directly from an accident such as a fall or an equipment malfunction. Or it may happen over time, such as repetitive stress disorders such as carpal tunnel syndrome, exposure to harmful workplace chemicals, or back injuries from heavy lifting.

Workers’ comp provides a percentage of replacement income for employees while they recover from their injuries. It also provides medical treatment and physical therapy related to the workplace injury.  And in the event of death, workers’ comp provides survivor benefits to the employee’s dependents.

Question: What does workers’ compensation insurance not cover?

Amanda: Workers’ comp does not cover injuries that can’t be directly attributed to the employer – such as an accident that is related to alcohol or drugs; an accident due to horseplay or a fight that the injured employee started; or any accident that has no relation to the employee’s job or workplace.

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