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What does Worker’s Compensation cover?

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As an employer, have you ever found yourself in a situation where you ask yourself - what does Worker’s Compensation cover?

Well, in short, employers are required by law to provide Worker’s Compensation for their employees. Whether they’re full-time, part-time or casual employees, this insurance is compulsory. Large companies often employ experts in Worker’s Compensation, but many SMEs don’t have the resources to hire this expertise.

So, here’s a quick overview of Worker’s Compensation providing the basics you need to know.

What is Worker’s Compensation Insurance?

Worker’s Compensation Insurance provides financial compensation to employees if they suffer a work-related injury or illness. It’s provided by the employer for the benefit of the employee with the terms of the cover based on applicable State or Territory’s specific Worker’s Compensation Act. If you have employees in separate States or Territories you may need a specific policy in each region.

What does Worker’s Compensation cover?

Worker’s Compensation covers a range of injuries that take place at work or are work-related. This can include physical injuries, mental health injuries, diseases and death.

Benefits of this insurance can include weekly living payments, coverage of medical and hospital bills, rehabilitation services, and lump sum payments for permanent injuries.

Eligibility for Worker’s Compensation

Under each State or Territory’s Act, generally speaking all employees are eligible if their injury occurred as a result of their employment activities.

All full-time, part-time and casual workers are eligible for this compensation. Company Directors, Contractors and Subcontractors can be included but is dependant on the respective State or Territory legislation.

The Fair Work Ombudsman provides a useful resource along with a list of these regulators by state or territory.

How to set up Worker’s Compensation for your business

If you’re starting a new business and you intend to hire employees, in whatever capacity, then you need to consider what Worker’s Compensation Insurance you require prior to setting up your business.

What if you’re a sole trader?

Sole traders can’t cover themselves with Worker’s Compensation Insurance, however, they do require it for any of their employees. For themselves, they need insurance that provides cover for accidents, sickness, illnesses, disabilities and death, as well as compensation for lost revenue while they recover.

What if you don’t have Worker’s Compensation Insurance?

Management Liability Insurance

Management Liability insurance is designed to provide protection to both the business and its directors or officers for claims of wrongful acts in the management of the business.

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Business Insurance

A business insurance pack can provide cover for your business premises and contents, against loss, damage, theft or financial loss from an insured interruption to the business.

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Business Package

Purchase up to six products under one Business Insurance Package.

Details Get a quote!

What if you don’t have Worker’s Compensation Insurance?

Whilst WorkCover or Worksafe makes sure that employees receive all their required benefits under the Act, the financial costs to an employer who doesn’t have this insurance can be substantial. Substantial penalties also exist for not obtaining this insurance.

To discuss what Worker’s Compensation Insurance your business needs or to arrange for insurance as a sole trader, talk to an insurance specialist today and find your local adviser.

General Advice Warning: This advice is general and does not take into account your objectives, financial situation or needs. You should consider whether the advice is appropriate for you and your personal circumstances. Before you make any decision about whether to acquire a certain product, you should obtain and read the relevant product disclosure statement.

All information above has been provided by the author.

Insurance Advisernet, ABN 15 003 886 687, AFSL 240549

This article originally appeared on Insurance Advisernet News and has been published here with permission.