Workers compensation insurance helps pay the medical bills and lost wages of employees who are hurt while working. Without this coverage, businesses may be required to pay these costs -- and the costs can be substantial. Medical bills for even relatively minor injuries can total four-figure sums, and serious injuries can require expensive ongoing care. These medical costs don’t include the wages an employee loses while they can’t work. Wages can potentially increase an employee’s claim by many thousands, depending on how long they’re out and how much they normally earn.
Workers’ Compensation insurance is required by Massachusetts law for all employers to protect employees who are injured on the job or contract a work-related illness, and to protect employers from being sued by their employees as a result of work related injury.
Some businesses that don’t have employees but whose owners are involved in regular operations may want workers compensation coverage even if they aren’t legally required to have it. Many health insurance policies don’t cover work-related injuries and illnesses, so workers comp insurance is sometimes the only way for owners who are involved in operations to protect themselves financially from injuries and illnesses they suffer while running their business.
Purchasing a workers compensation policy doesn’t take away an injured employee’s right to sue their employer for pain and suffering, medical costs, and lost wages associated with a work-related injury. An injured employee could theoretically still sue instead of filing an insurance claim. Having a workers compensation policy does, however, give employees little incentive to sue.
Lawsuits are long, drawn-out affairs, and there’s no guarantee that the employee will be successful in their suit against a business. Not only do they face uncertainty about the outcome of the suit, but they frequently also must face mounting medical bills before the suit is settled.
In contrast, workers compensation claims are generally resolved quickly, and employees are able to collect payments for valid claims in just a short amount of time. The vast majority of employees choose to file a workers compensation claim when they’re injured or become ill, rather than file a lawsuit.
When employees file a workers compensation claim, they typically forfeit their right to sue. While policies don’t normally preclude employees from suing before they file a claim, most policies’ terms require employees to agree not to file a lawsuit after they initiate an insurance claim.
In Massachusetts, workers compensation insurance is purchased on the open market. To compare the different policies that are available, businesses should contact an independent insurance agent. A knowledgeable agent will be able to request quotes for policies from different insurers and help a business compare the different quotes.