Your business has many moving parts, and safety for your team is one of the big ones. If an employee gets hurt at work, you want to have coverage in place to help them while also protecting the interests of your business. To prepare for the worst, you purchase a workers’ comp policy that may help support you both should an incident occur. But then your insurance agent asks you about short-term and long-term disability insurance – why do you need those policies if you’re already covered for workplace injuries? Let’s review why the circumstances may make all the difference.
Workers’ Compensation Coverage
Work comp coverage will typically cover medical expenses of employees that get injured on the job doing tasks related to their role. It may also replace a portion of their wages while they miss work to recover from the incident. Other claims, such as training a replacement, permanent injuries, and in the worst case – death benefits – may also be payable from workers’ comp.
However, these injuries have to be work-related. What happens if your employee is in an accident outside of work that leaves them unable to perform the duties of their job? That’s where disability coverage may come into play.
Short-term Disability Coverage
If you have an employee that is injured – let’s say in a car accident as an example – and needs time to recover, a short-term disability policy may help pay them a percentage of their salary for a time determined by the policy. This is often for a term of weeks, months, or possibly a year. And while disability “insurance” from Social Security may be available, that only applies after a term of five full months of the disability has elapsed.
Long-term Disability Coverage
As you might imagine, long-term disability typically has a greater amount of time that the policy will provide income replacement. While the amount and time period will depend on the policy, some terms may be for as long as it takes to reach retirement age.
In addition to policies through a business, some people decide to purchase individual disability policies. These may cover more income replacement, and/or may have longer terms of coverage.
What’s right for your business and your employees? Talk to our agents about your risks and coverage needs, and we’ll help you understand your options.