You know you want to protect your employees, but sometimes the different options for covering them can be confusing. If an employee gets hurt at work, you want to have coverage in place to help them and also protect the interests of your business. As a result, you purchase a workers’ compensation policy that will help support you both should that happen. 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? Let’s break it down.
Workers’ Compensation Coverage
Workers’ 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 the miss work to recover from the incident. Other claims, such as training replacement staff, 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 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 occurred.
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 depends on the policy, some terms are as long as though 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? Get in touch with Brandon Patterson at our agency by calling 865.453.1414 or emailing kevin@ownbyinsurance.com to discuss your insurance options.