What is Workers' Compensation?
Insurance glossary entry on BeCovered.ai for the term "Workers' Compensation": State-mandated coverage paying medical and wage benefits for work-related employee injuries. Scope: plain-language meaning for coverage discussions; confirm definitions on your policy forms.
State-mandated coverage paying medical and wage benefits for work-related employee injuries.
Understanding Workers' Compensation
Workers comp is a no-fault system exclusive remedy in most cases. Premium is class-code and experience modification driven. Misclassification (1099 vs W2) creates serious compliance gaps.
Examples
- Warehouse worker lifts injury—WC pays treatment and indemnity per state schedule.
- Monopolistic state funds require purchase through state program.
Common Questions About Workers' Compensation
Do owners need WC on themselves?
State rules vary—some allow exclusion; construction contracts may still require it.
WC vs employer's liability?
Part B of WC policy covers certain lawsuits outside exclusive remedy where allowed.
Related Insurance Types
Related Terms
Liability
Legal responsibility for causing harm or damage to another person or their property.
Claim
A formal request to your insurance company for payment or coverage for a loss or policy event.
Exclusion
Specific situations, conditions, or types of damage that your insurance policy does not cover.
Premium
The amount you pay to your insurance company for your coverage, typically monthly or annually.