Most states require worker’s compensation insurance, also referred to as worker’s comp. Every state has a unique set of guidelines and rules determining which employers need to carry worker’s compensation. Unfortunately, plenty of businesses buy it to remain compliant and don’t fully understand the coverage.
Many businesses think they only need worker’s compensation to pay for medical expenses and time off for injured employees. While that is true, there is another significant benefit of worker’s compensation insurance: the exclusive remedy provision.
The exclusive remedy provision protects employers from being sued by employees injured on the job. If the injured employee is already receiving benefits from the worker’s compensation policy (medical payments and lost wages); they cannot claim any additional benefits like a lawsuit settlement. The purpose of the exclusive remedy is to minimize the number of irrelevant lawsuits. It saves both the business and courts time and money.
While the exclusive remedy is beneficial, there are a few exceptions to the law businesses need to be aware of. The list of exceptions varies by state, but here are some of the most common exceptions:
The exclusive remedy provision isn’t guaranteed protection for businesses. There are steps they can take to assure the exclusive remedy remains relevant when an employee injury occurs.