The Basics of Disability Coverage

The Basics of Disability Coverage

There are several things that could force a company out of business. These include losing key customers, new competitions, supply chain interruptions or lack of financial reserves. Workplace injuries can cause you to lose key employees, and without the right insurance coverage in place, your business may be faced with a serious lawsuit over lost income. Providing disability insurance is a way to protect a skilled talent pool and encourage employee loyalty even in the face of potential injuries.

Required Coverage

While workers’ compensation coverage is mandated for most businesses operating within the United States, disability coverage is only required in five states. These mandated programs are for short-term coverage and limitations are set by the state. If you don’t operate in one of the areas, you may need to consider the benefits of offering short term vs long term disability insurance or both.

Lost Wages Financing

In both cases of coverage, disability insurance will pay for a portion of an employee’s lost wages when they aren’t able to go to work. The injury or illness does not have to be work-related. Short-term coverage is in place for up to six months, while in some cases, long-term benefits can be extended until the individual can qualify for Social Security benefits.

Providing this benefit helps attract qualified help, and when combined with workers’ comp coverage, demonstrates the company’s priority toward employee wellbeing. Disability insurance can help employees avoid financial ruin when they are unable to work.