Who Provides Workers’ Compensation Benefits?

Personal Injury Lawyer

If you are employed by a business, your employer likely purchases workers’ compensation insurance to cover you in case you are hurt or become sick while working. In the end, the employers of the state you live and work in are paying for your benefits if you’re eligible for workers’ comp.

Depending on state laws, there are a few options they can choose from to handle their specific program. Some states require that you claim your benefits through the state government, while other states allow insurance companies, third party administrators, or the employer themselves, to handle everything. The benefits do not change no matter how they get to you.

Management of Workers’ Compensation Programs

  • State-Run: Many states allow (or require) employers to purchase workers’ comp. through the state program or insurance fund, and this may come from the department of labor, industrial relations, or similar type of office. Small businesses or those with very few incidents often use this route. Thus, your employer would pay insurance premiums to the state, and then you as an employee would collect benefits from the state.
  • Insurance Company: Private insurance companies also offer workers’ comp. programs in the states that allow this. Many medium to large businesses choose this route for their insurance needs. In this case, your benefits would be paid by the insurance company.
  • Self-Insured: Some very large businesses that have enough assets are able to cover the necessary amount of workers’ comp. liability. States usually step in to ensure these companies are following all laws and procedures and are covering the workers fully and fairly. This is where a third-party may be hired to handle the paperwork and other details.


If you’re self-employed, such as an independent contractor or freelancer, you can choose to purchase workers’ compensation insurance for yourself. In some states, it might be difficult to obtain coverage from an insurance company as an individual, but areas with a state-run program are more likely to offer coverage.

It also happens that some companies misclassify their employees as independent contractors so they are not liable for workers’ comp. when they really should be. As well, some states require businesses to classify their contractors as employees specifically for workers’ comp. so check with the laws in your state to make sure you’re covered. A lawyer can be helpful in this type of situation, especially if you’ve already suffered injury or illness.

Receiving Full Benefits

Employers who purchase workers’ compensation are required by law to give you the benefits outlined in your state’s laws. If you have a claim that hasn’t been handled correctly, or if you’re not receiving the full benefits that you’re entitled to, hire a workers compensation lawyer in Milwaukee, WI to help analyze your case and protect your rights as an employee.

Thanks to Hickey & Turim, SC for their insight into workers compensation and who provides benefits.