Equine Law Blog

Who Needs Workers' Compensation Insurance?

A barn worker, while driving to the feed store to pick up a load of grain, is injured in an auto accident.  A stable employee gets kicked in the head while pasturing a horse.  Both have huge medical bills, and it will be months before either can return to work.  This article generally explores the law of workers' compensation.

What is Workers' Compensation?

Generally speaking, when employees are injured, ill, or die in the course of employment, they -- or their families or dependents -- are often entitled to collect workers' compensation benefits.  The entitlement is virtually automatic, as long as the worker qualifies as an employee and experiences an on-the-job injury.  Workers' compensation laws were enacted to reduce court delays, encourage safety, and to give injured employees a reliable source of income and benefits, regardless of who was at fault in causing the injury.  All 50 states and the federal government now have some type of workers' compensation law.

In the workers' compensation system, employees receive benefits regardless of who caused the accident.  This means that the barn worker who was kicked in the head while trying to pasture a horse, even if his own negligence and inattentiveness helped cause the injury, could potentially recover benefits.

What Does Workers' Compensation Cover?

Workers' compensation benefits vary depending on the severity of the injury.  They can include reimbursement for medical expenses, doctor bills, hospital stays, and rehabilitation costs.  Benefits can also include reimbursement for a certain amount of the worker’s lost income.  Should a worker die, the laws provide certain benefits to his or her spouse and certain dependents (such as the worker’s children).  Losses, such as "pain and suffering," are generally not recoverable through workers' compensation.  However, the injured worker might seek to recover them from others who may be responsible for the injury through a separate legal action.  (For example, maybe a defective machine was at fault.)

Disputes or appeals involving the amount of workers' compensation benefits, or the denial of benefits, are usually directed to an administrative body, often called the workers' compensation appeals board.  Decisions of that board can be appealed further.

Who Qualifies?

Workers' compensation benefits are only available to "employees" (as defined in the applicable state law) who suffer illnesses, injuries, or death arising "out of and in the course of employment."  In the example at the beginning of this article, both the injured driver and stable worker would likely have claims. 

Do You Need Workers' Compensation Insurance?

Many state laws require all employers to purchase workers' compensation insurance unless the employer falls within certain categories of exemptions.  Some exemptions, for example, could apply to farm workers (but read the applicable law very carefully -- stables might not qualify).  Other exemptions can include volunteers, family members who help others for free, and those who work for certain non-profit organizations. 

Who Pays?

Employers are solely responsible for paying for workers' compensation insurance, unless they legally qualify as "self-insured."  Employers cannot recoup the cost of insurance from their workers; consequently, payroll deductions to finance insurance premiums would be unlawful.

What Happens With Uninsured Employers?

Employers who are legally required to have workers' compensation insurance but fail to purchase it and do not qualify as "self-insured by law" usually can be sued through the court system.  There, if the employer was found to be negligent, and if that negligence directly caused a worker's injury, the employer would be liable for the injuries.  State laws, that differ nationwide, might even impose extra penalties on uninsured employers.

If you have any questions about workers' compensation, please let me know.

Categories: Insurance, Liability