If you have employees, Workers’ compensation insurance is mandatory in Connecticut, as well as, the other 49 states. Each state manages it’s own Worker Compensation Fund through the Connecticut Department of Insurance. It is a contract between your company and your insurance company in which the insurer agrees to pay for lost wages, medical costs, temporary disability, permanent disability, or death benefits that result from workplace injuries or illnesses. In most cases, having workers’ compensation insurance also protects your business from being sued by injured employees.

Two Parts:

A workers compensation policy has two parts namely the state fund and the employer’s liability. The first part most employees are familiar with. It is the state fund portion. The majority of claims are recorded in this part. The policy works like the old game show “Let’s Make a Deal”. In theory, the employee can choose either door and once a door is chosen, the other door is no longer an option. Said another way if the employer chooses the state pool, generally the employer liability part of the policy is no longer exposed to a claim unless the employee decides to pay back all of the expenses incurred in order to sue the employer liability portion. The majority of claims are settled in the State Fund.

Workers’ compensation insurance covers most injuries that arise out of work-related activities, including everything from accidents at work to repetitive stress injuries. Workers’ compensation insurance also provides coverage for work-related illnesses or diseases. Coverage for your employees will typically include the following:

• Rehabilitation costs and medical bills
• Weekly payments to replace lost wages
• Temporary or permanent disability payments
• Death benefits for the family if an employee dies
• Funeral and burial costs
• Legal fees