Almost every workplace faces some form of work-related injuries or illness, such as stress and depression, falls and equipment malfunction. Therefore, every business must prepare for such eventualities by taking insurance cover for its employees to cater for medical expenses and wage compensation. In Australia, each state or territory has laws and regulations that govern workers' compensation insurance. This article highlights some top facts about Australia's workers' compensation insurance. The information is useful for businesses to remain compliant with state or territory laws.
Why Workers' Compensation Insurance Is Necessary
Any business should endeavour to protect itself from legal and financial liabilities. Take a hypothetical scenario where one of your employees becomes sick or is injured at the workplace and is forced to take a month off from work to seek medical treatment. You have to find another employee to replace the injured worker, and you might also be forced to foot the medical expenses apart from paying the injured employee's wages. Therefore, workers' compensation insurance protects a business from incurring such prohibitive costs that can jeopardise financial stability. When a business insures its employees against work-related injuries and illnesses, an insurance company pays medical expenses and lost wages instead of the company. Besides, am insurance package mostly includes an employer's liability clause. It takes care of all legal costs (court costs and lawyer's fees) in case of protracted legal proceedings pitting the employer and the injured employee.
Employers should ensure that a workplace adheres to occupation safety and health regulations to minimise risks associated with work-related injuries. Furthermore, complying with such laws and regulations can reduce the number of insurance claims while also protecting a business from the threat of bankruptcy. If your business is inspected and found to be lagging in adhering to occupational safety laws, then it can face hefty penalties. Notably, workers' compensation insurance does not cover penalties imposed by a regulatory agency.
To be eligible for workers' compensation insurance, a worker must meet the criteria of an employee as prescribed by individual jurisdictions. Each state or territory has different categories of employees that are eligible for workers' compensation insurance, and thus, a one-size-fits-all definition does not apply. Moreover, a worker must have suffered some financial loss, including medical costs and loss of income as a result of injury or sickness. Lastly, a certified medical practitioner must diagnose that a medical condition was sustained in the line of duty. Therefore, general harm, including discrimination and emotional distress, is not included in a workers' compensation insurance claim.
Contact a provider of business insurance to learn more.