Workers’ compensation insurance in New York

Understanding workers’ compensation insurance

Workers’ compensation insurance pays an employee’s medical bills, rehabilitation costs, and lost wages if they get sick or injured while performing their job duties. It only applies to significant injuries and illnesses that require medical treatment and impact the employee’s ability to do their job, like a broken bone or exposure to toxic chemicals. 

Many workers’ compensation insurance policies also cover the employer’s liability. If an employee gets injured or sick at work and sues their employer, the business’s workers’ comp policy would cover their legal fees and attorney costs.

Is workers’ comp required in New York?

Businesses are required to have workers compensation insurance in New York. The only state that doesn’t require businesses to carry workers’ comp is Texas. However, every state has different workers’ compensation laws, and some states have unique requirements for certain industries, like construction.

How does workers’ comp work in New York?

If an employee gets injured or sick at work, they can file a claim with their employer’s workers’ compensation insurance company to get reimbursed for their medical expenses. A workers’ comp policy in New York will also pay for partial lost wages, medications, and rehabilitation.

In the event of a fatal workplace accident or illness, workers’ comp provides a death benefit to the employee’s beneficiary to cover their funeral expenses.

New York workers' compensation benefits

New York workers’ compensation has a variety of benefits for small businesses, including:

• Covers medical treatment costs for injured or sick employees
• Helps employees recover and return to work more quickly
• Reimburses partial lost wages for employees during their recovery
• Limits an employee’s ability to sue their employer over the incident
• Pays a death benefit in the case of a fatal workplace accident

How much does workers’ comp pay in New York?

As outlined above, workers’ compensation in New York usually covers the full cost of an employee’s medical treatment if they get sick or injured while performing job duties. However, workers only receive partial income replacement, which is based on their salary.

It’s common for an employee who is completely disabled and unable to work to receive two-thirds of their average weekly wages. Additionally, every state has a maximum weekly rate, so income replacement is still capped for the highest-earning employees.

New York workers’ compensation laws

As a business owner, it’s important to familiarize yourself with New York workers’ compensation laws for employers. Workers’ comp laws are different in every state.

In New York, workers’ compensation law requires:

In some locations, nearly every business with at least one employee is required to carry workers’ compensation coverage. In other states, businesses only need workers’ comp if they have multiple employees, or operate in certain industries.

You can learn more about New York workers’ compensation laws by visiting the state's bureau of workers’ compensation, insurance department, or department of labor.

Who is exempt from workers' compensation insurance in New York?

Some businesses may not be required to have workers’ compensation in New York. But usually, the only businesses that can opt out are sole proprietors. In most states, sole proprietors are not required to carry workers’ compensation, and instead, have the option to self-insure.

When does workers' comp start paying in New York?

Workers’ comp usually  starts paying once the employee’s claim has been approved. Typically, workers’ comp will retroactively cover medical bills related to the injury or illness before the claim was approved. Additionally, lost wages will be partially reimbursed beginning on the first day the employee was unable to work.

How to buy workers' comp in New York

Businesses in New York can purchase workers’ compensation from a licensed insurance company. Additionally, some states have a state-funded workers’ compensation fund where businesses can get coverage.

After you choose where to purchase workers’ compensation, you will need to contact the insurance company and apply. You will need to provide paperwork, like your current payroll and return to work plan. The insurance company will provide a quote, and if you’re satisfied with the cost, you can purchase the policy.

How to file a workers' comp claim 

The process of filing workers’ compensation insurance claims differs based on the insurance company and state. Here are the general steps you should follow to report a claim:

1. Employee reports their injury: The employee who gets injured or sick should report the incident to their employer immediately. Depending on the insurer, the employee may need to be evaluated by a doctor in the insurance company’s network as part of the claim process.
2. Employee completes the claim paperwork: The employer will explain the process of filing a workers’ comp claim to the employee, and provide the required paperwork. The employee must complete the paperwork and provide evidence of their injury or illness, like a doctor’s note or medical records.
3. Employer files the claim: The employer is usually responsible for notifying the insurance company and submitting the employee’s claim paperwork. Most states require claims be filed within a certain time frame. Additionally, the business owner might need to report the incident to the state’s workers’ compensation bureau.
4. Claim is reviewed and employee receives benefits: The employer’s insurance company reviews the claim and decides if the claim is covered. If the claim is approved, the insurer will notify the employee and employer with their compensation offer. Once both parties agree on a payment amount, the employee will begin receiving their benefits.

What our expert says

Q: How does workers comp benefit employees and employers?

Ben Klesinger Co-founder and Chief executive officer of Reliant Insurance Group and Helping Hand Financial.

"For employees, it provides coverage for medical bills and income replacement, so they can recover and return to work. For businesses, it reduces liability risks and ensures compliance."