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What Is Workers' Compensation?

Workers' compensation ensures employees injured on the job receive appropriate, approved medical treatment and lost wages for time out of work. To be eligible, the injury must result directly from your job duties, as outlined by state law.

Why is workers' compensation necessary?

Before workers' compensation laws, an employee injured on the job would need to sue their employers for damages to cover their medical expenses. Often, employers defended themselves from liability by arguing:

  • The employee caused or contributed to the accident;
  • The employee took the risk by taking the job; or
  • A fellow employee was responsible for the accident.

Today, the federal government and every state in the United States have workers' compensation legislation.

The common thread? Employers must provide treatment for work-related injuries and illnesses.

What does workers' compensation cover?

The specifics of workers compensation insurance vary by state, and insurance carriers must comply with state laws. For a job-related injury or illness, a typical policy covers:

  • Medical expenses
  • Wage loss
  • Death or disability benefits

Job-related injuries can have serious implications for employees. Besides the medical costs involved, a worker might be temporarily or permanently disabled, losing time and wages from work. If an on-the-job accident causes death, the worker might leave dependents.

Who is eligible for workers' compensation insurance?

Workers' compensation laws cover nearly all industrial and private employees, including:

  • Full-time employees
  • Part-time employees
  • Subcontractors who are not independent contractors
  • Temporary employees
  • Leased employees working for Professional Employer Organizations (PEOs)

Some states exclude specific types of employees, such as farm workers, domestic workers, and casual employees. Others, like maritime workers, federal workers, and interstate railroad workers are covered under separate laws guaranteeing compensation for on-the-job injuries.

The information and descriptions on this site are general in nature. The coverage afforded for a particular loss depends on the specific facts and the terms, exclusions, and limits of the actual policy. Nothing on this site alters the terms or conditions of any policy, as the policy controls coverage. Coverage options, limits, discounts, deductibles, and other features are subject to underwriting criteria, state availability, and effective dates. Coverage provided and underwritten by NJM Insurance Company and its subsidiaries, 301 Sullivan Way, W. Trenton, NJ 08628.