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What is Workers Compensation Insurance?

Workers compensation insurance, also referred to as workers comp insurance, helps provide benefits to employees who are injured or become ill because of their job. It’s generally referred to as a no-fault system, as employees do not have to prove that their employer was negligent to receive benefits. This coverage is generally required to be held by the business owner if they have employees.

What does Workers Compensation Insurance Cover?

Workers’ compensation helps your employees recover from work-related injuries or illnesses. It can help protect your business if your workers:

  • Hurt themselves lifting a heavy box in the office
  • Develop carpal tunnel syndrome from poor typing habits

This policy can also help pay to train your employees for new roles if they can’t return to their old job. In the event the injury was so severe that they couldn’t return to work at all, workers’ compensation coverage can help provide long-term disability benefits.

Workers’ compensation insurance typically covers the following benefits:

  • Medical care and treatment
  • Replacement of lost wages
  • Disability & death benefits

Who Needs Workers Compensation Insurance?

In the United States, most states require employers to provide workers’ compensation insurance to their employees. There are a few exceptions, such as employers with very few employees or states that simply don’t require it, such as Texas[1].

[1] Workers’ compensation insurance guide (

How Much Does Workers Compensation Insurance Cost?

The cost of worker’s compensation insurance can vary depending on many factors.  These include company payroll, the industry the business is in, the number of employees, and more. 

According to Hartford, a leading provider of worker’s compensation insurance, their customers pay an average of $70 per month for coverage[2].

[2] Workers’ Compensation Insurance | The Hartford

Why Do You Need Workers Compensation Insurance?

There are many reasons why you need worker’s compensation insurance. Some of the most important reasons include:

  • Protect your employees: Worker’s compensation insurance can help to ensure that your employees receive the medical care and financial assistance they need if they are injured or become ill on the job.
  • Protect your business: Having worker’s compensation insurance can help to protect your business from financial losses if an employee is injured or becomes ill on the job.
  • Comply with the law: In most states, employers are required to provide worker’s compensation insurance to their employees. Failing to do so can result in fines and potentially other penalties.

Worker’s compensation insurance is an important type of insurance for employers. It can help to protect your employees, your business, and yourself from financial losses if an employee is injured or becomes ill on the job.

Here are some additional tips for understanding worker’s compensation insurance:

  • Talk to an insurance expert to better understand the coverage relative to your specific needs.
  • Read your policy carefully to understand the coverages and exclusions and make sure you are familiar with the service and claims process.
  • Ensure that proper documentation is kept including all injuries and illnesses that occur in your workplace.


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