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Disability Insurance vs. Worker’s Compensation: What’s the Difference?

When you get injured at work due to your company’s negligence, then you’d expect to receive compensation for it. But what happens if you got a severe injury outside of your job? Understanding the differences between disability insurance and Worker’s compensation can help you know what coverage you have.

Coverage Differences

On the surface, Workers’ compensation and disability insurance both provide financial support for employee injuries and sickness until they can start working again. However, the main difference is:

  • Workers’ compensation covers issues received during your job as long as it isn’t your fault. 
  • Disability insurance covers issues received outside of the workplace.

Injuries from car accidents, diseases like rheumatoid arthritis, and even mental illnesses like schizophrenia are examples that can receive this kind of coverage. 

How Much Do You Get for Workers’ Compensation?

Don’t expect to get the equivalent of your full paycheck for each day you miss work. You’ll be receiving part of the wages lost. However, you can expect your medical expenses to be fully covered. 

There are other circumstances where you can get paid entirely by Worker’s compensation. If you can’t continue your occupation at all because of the injury, then you can get complete coverage. The same goes for permanent injuries.

Why Employers Might Offer Disability Insurance Instead of Workers’ Compensation

You might think that there isn’t much of a problem because you’re receiving financial coverage either way. However, the significant difference is whether you keep the compensation. With short term disability (STD) insurance, you must pay back the monetary support you received later.

Your company has a specific plan where you pay a premium for this coverage.

An employer that asks you to get STD insurance might be unaware of Worker’s compensation or the distinction between these two types of coverage. Another reason could be that they want to save money for the company. Either way, it’s recommended that you get an attorney to help you out with this situation.

Being Denied Workers’ Compensation

You might not have evidence that receiving an injury at work is due to the company’s negligence. Even with a lawyer present, your company might still deny you any worker’s compensation. That doesn’t mean that you can’t receive some coverage.

You can apply for STD benefits after your company refused to provide you with Worker’s compensation. Be sure that you check on your company’s policies on STD insurance because they vary with each business. Keep in mind that your employer could deny you this type of coverage as well.

Final Takeaway

Workers’ compensation and disability insurance both provide coverage for injuries in and out of your job, respectively. Regardless of which one you think you qualify for, you should contact a lawyer to help you with this case. A professional can get through the complicated legalities of the issue and ensure that you receive the full benefits.

Updated on May 5, 2020

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