Worker’s Compensation

Workers compensation laws were created to ensure that employees who are injured on the job are provided with monetary awards determined on severity of their injuries or illness. This eliminates the need for litigation against the employer and creates a process for the employee. Since many states limit the amount an injured employee can recover from an employer, it helps control the financial risks for employers.

Do I need Worker’s Compensation?

Wisconsin law mandates compensation insurance for:

  • Any employer who usually employs three or more persons full- or part-time. This employer needs insurance immediately.
  • Any employer who has one or more full-time or part-time employees and has paid gross combined wages of $500 or more in any calendar quarter for work done in Wisconsin. This employer must have insurance by the 10th day or the first month of the next calendar quarter.
  • Anyone engaged in farming who employs 6 or more employees (at one or more locations) on the same day for 20 days (consecutive or nonconsecutive) during a calendar year. A calendar year is January through December. The farmer must have insurance within 10 days after the 20th day of employment. Some relatives of the farmer are not counted as employees.

There are a few classes of employees that are exempted from coverage by workers compensation and are covered by federal laws such as employees of the federal government(such as postal workers, employees at a veteran’s administration hospital, or members of the armed forces) that are covered by federal laws. People who work on interstate railroads are covered by the Federal Employers Liability Act. Seamen on navigable waters are covered by Merchant Marine Act of 1920, and people loading and unloading vessels are covered by the Longshoremen’s and Harbor Worker’s Compensation Act.

What does workers compensation cover?

Workers compensation is designed to protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents. Workers Compensation Insurance is designed to help companies pay these benefits. Workers compensation insurance covers workers injured on the job, whether they’re hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses. Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Is Workers compensation Insurance included on my current business policy?

Workers compensation insurance must be bought as a separate policy. Although in-home business and business owner’s policies (BOPs) are sold as package policies, they don’t include coverage for workers’ injuries.


In most states, if you have employees, you are required to carry Workers Compensation coverage. Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.