Whether you are an employer or an employee, workers compensation insurance is a critical consideration in every workplace. Workers compensation refers to insurance that covers medical and rehabilitation costs as well as lost wages for employees injured at the workplace. It is a requirement by law that all employers ensure that their employees are covered against work-related injuries.

In Australia, workers compensation is regulated by the state government. In Tasmania, Western Australia and Northern Territory, insurers underwrite the scheme. The state operates the scheme in Queensland. In South Australia, New South Wales and Victoria, insurers act as agents for the scheme on behalf of the state authorities. The benefits of compensation insurance may be divided into;

Medical Benefits

The medical benefits of the worker's compensation insurance are unlimited without any deductibles. If a worker suffers an injury at the workplace, payments will be directly made to the healthcare provider up to the point that he or she fully recovers. The insurance cover will cater for medical costs, medication costs, nursing fee, surgical fee and any other costs necessary to ensure relief and full recovery. Depending on the jurisdiction under which the cover was made, the physician choice may vary. Rehabilitative benefits covered by the scheme include medical rehabilitation, psychological rehabilitation and vocational rehabilitation. An employee is extended to these benefits if they suffer a catastrophic injury as defined by the state law that governs the compensation insurance.

Disability or Indemnity Benefits

After the injury, the employee may be unable to work or earn the same amount of pay they did before the injury. Such would subject them to loss of income and reduced quality of life. In addition to medical benefits, workers compensation insurance covers loss of income benefits to employees who suffer disability due to workplace injury. The disability benefits paid out by the scheme are determined by statutory-defined limits, the severity of the injury, and expected term of the injury.

Death Benefits

These benefits are paid out in case death occurs as a result of a work-related injury. The benefits cover funeral expenses and benefits to the employee's dependents. Depending on the state law, payouts will vary.

The premiums for workplace compensation insurance are determined by the risk profile of both the occupation and workplace.

State law requires workplace compensation insurance in every workplace. Its nature and payouts are varied across various states in Australia. Benefits may be either medical, disability or death benefits depending on the extent of the injury.