Asking whether you are able to buy workers' compensation insurance for yourself is an important question, as the amount that an employer supplies rarely seems enough to cover any serious injuries. Other types of insurance provisions will also help to offset the risk of injury which disallows you to work for a stipulated period of time, as well. Adequate coverage is important for peace of mind.
Workers' Compensation Insurance
Workers' comp insurance requires that a business provide medical coverage and income replacement to workers who are injured while performing job duties. The workers' comp program is state-mandated and state-governed, requiring that all businesses participate. The program also requires that every business make available the documentation regarding workers' comp laws, so as to avoid being sued by employees. There are three methods of procuring workers' comp insurance; through the provision of a state insurance fund, by obtaining private insurance or through self-insurance.
Self-insurance plans are not plans in which you buy your own coverage. Rather, it is a cost-saving mechanism that allows businesses to set aside funds to pay for workers' comp claims without purchasing an insurance policy. Not all states allow companies to self-insure; however, in those that do, many businesses are opting for this option because it saves them from the necessity of a monthly premium. This is particularly beneficial to small businesses because they have few employees and low risk of a future payout.
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While you may not purchase your own workers' compensation insurance policy, you may purchase disability insurance. The Social Security Administration offers some relief to those which experience an injury or illness that prohibits them from working. This injury need not occur while working, as with workers' comp. However, there are limits as to how much coverage you will receive from these federally provided funds, which may not cover all of the necessary daily living expenses that you have. While some businesses also provide employees the option of selecting short-term disability coverage in a group plan, it is usually for only a short period of time.
Purchasing Extra Coverage
You always have the option to purchase extra disability insurance from a private company. If you foresee the possibility of injury or illness that will limit your ability to work, buying a policy that provides for long-term coverage and extra monetary benefits may be a good idea. Before signing an insurance contract, however, weigh the costs of the added monthly expense against the likelihood you will benefit from the policy during your working life.
- U.S. Department of Labor: Workers' Compensation
- New York State Workers' Compensation Board: Self-Insured Employers
- California Department of Industrial Relations: Self Insurance Plans
- "Personal Financial Planning, Theory and Practice"; Kaplan Schweser; 2009