Do all employers need to insure workers' compensation liability?

Pennsylvania law mandates that all employers carry workers' compensation liability insurance that covers all employees unless an employee is excluded under the law. When a Pennsylvania employee falls ill or is injured on the job, the employee can file a compensation claim with the employer. Medical expenses, lost wages and other related expenses are paid to the employee either by the employer or an insurance company.

An employer with at least one employee should have insurance to cover:

  • An employee injured on the job or sustains an illness due to the nature of work in Pennsylvania.
  • Any employee who sustains injuries related to work outside Pennsylvania when employment is principally localized within the state.
  • The contract for hire is made in Pennsylvania, but the employee is injured outside the state because:
  • employment is not localized in Pennsylvania,
  • employment is localized in a state with workers' compensation laws that will not apply to the employee, or
  • employment is not in Canada or United States.

An employer has various methods to insure its workers. It can purchase a workers' compensation policy from the State Workers' Insurance Fund through a licensed insurance company or secure the state's Department of Labor and Industry's approval to self-insure.

Workers' compensation provides medical benefits and lost wages and also protects employers from tort liability lawsuits filed due to workplace injuries or diseases. It also protects the employers from criminal prosecution for non-compliance.

When an employee is injured or suffers from a work-related illness, he or she can seek workers' compensation to cover financial losses caused by the incident. Sometimes, the insurance company will try to stop benefits or seek a settlement. In such cases, workers should be aware of their rights and demand fair and adequate compensation based on their situation. They can also file a claim petition if workers' compensation benefits are denied by the insurance company.

Source: State.PA.us, "Workers' Compensation Compliance," Accessed on Sept. 5, 2014

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