A Guide to Long-Term Disability Insurance
As a business owner, you must protect your employees in the event that they suffer an injury. Read this guide on long-term disability insurance.
Recent studies estimate that 61 million Americans live with disabilities.
In many cases, these conditions will have arisen due to a workplace accident. If you are an employer and an injury happens to someone working for you, you may be liable for related expenses.
Read on as we explain long-term disability insurance, and why you should get it if you don’t already have it.
What Is Defined as a Long-Term Injury?
The first question to be answered here is why a given injury is perceived as long-term rather than short-term.
An injury will qualify as a long-term disability if it prevents the sufferer from working for a period of at least three months.
The average length of a long-term disability claim is three years.
What Is Long-Term Disability Insurance?
Long-term disability insurance provides financial coverage to those who are disabled for a long period. It also covers those whose injuries leave them incapacitated permanently.
It is mostly similar to other types of insurance that you may have. Premiums are generally paid on a monthly basis.
The income replacement that disabled parties are entitled to will vary from policy to policy. However, 60% of their regular salary is a rough average. More comprehensive policies may cover as much as 80%.
Unlike short-term disability cover, long-term disability insurance will cover mental issues such as depression. Chronic illnesses are also covered.
Are You Legally Required to Have Long-Term Disability Insurance?
Employers are not legally required to take out long-term disability insurance policies in respect of their employees.
However, if there is a high risk of an employee injuring themselves during work, it may be a good investment. This is particularly relevant if your business is one that exposes workers to physical risk (mining, for example).
If a court determines that an injury sustained by one of your employees was a result of negligence on your part, you will be liable for their medical expenses and continued wage payments.
With no insurance, these expenses could be crippling for your company.
Terms and Conditions
There will usually be an elimination period included in a long-term disability policy. This is a period of time that an injured person must wait after an injury before they are allowed to make a claim.
Many policies state that the disabled person loses the right to payment if they take up other work while they are injured.
How Has COVID-19 Affected Long-Term Disability Insurance?
With 90% of New Jersey’s working population either out of work or working from home, the insurance landscape has changed considerably.
You may be wondering whether you still need disability insurance if your employees are all operating from home. However, while there are fewer risks, the threat of an injury or accident still exists.
Your employees could still suffer stress injuries while working at home, or even a major injury from, for example, falling down a flight of stairs. Depending on the circumstances, you might be liable for such an occurrence.
Therefore, you should still take out long-term disability insurance. Get in contact to work out a tailored insurance solution for your new situation.
Should You Take out Long-Term Disability Insurance?
As you can see, long-term disability insurance can save employers a lot of financial hardship.
While an extra insurance premium might sound like an unnecessary cost, this kind of coverage could end up saving you a huge amount of money in the long run. It could also provide one of your valued employees with badly needed financial assistance in the event of an accident.
If you have a question about long-term disability insurance, or you would like a quote, contact us today.