Workers’ compensation is a no-fault liability system that provides income and medical benefits to an employee for an injury or illness arising out of his\her employment. The no-fault aspect means that an employee does not need to prove that the injury or illness was someone else’s fault in order to receive benefits. In most cases, an injured employee covered by workers’ compensation insurance cannot sue the employer.
If you use subcontractors, you may be held liable for their injuries or damage they cause and your Workers Compensation Insurance Company is entitled to collect premium on uninsured subcontractors.
The final premium of a workers’ compensation policy cannot be calculated until the policy term is over and your payroll records have been audited. This final audit determines if the initial payroll estimate was either high or low. If the payroll has gone up from the estimate, you will owe additional premium. If the payroll has gone down from the estimate, the insurance company will owe you a return premium. Your carrier has the right to audit payroll records at any time. Failure to comply with an insurance company audit can lead to cancellation or non-renewal of a policy.
Workers’ compensation provides two main benefits:
Wage Replacement Benefits: This coverage replaces some or all of the employee’s pre-injury wage. Benefits are time-limited unless permanent and total disabilities entitle the employee to lifetime benefits.
Medical and Rehabilitation Benefits: This coverage provides for payment of related medical care and vocational rehabilitation costs to an injured or sick employee.
Source : Massachusetts Division of Insurance Small Business Guide to Commercial Insurance
www.mass.gov\doi
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