The Difference Between Workers’ Comp Vs. Disability Coverage

By Elizabeth Ingram | Vice President – Operations CU Insurance Solutions

Knowing when workers’ compensation applies rather than disability insurance coverage can be confusing.  Here are a couple of pointers to help distinguish between the two different types of coverage:


Workers’ Compensation

Workers’ compensation (once known as workman’s compensation) is for job-related injuries and illness.  If an employee gets injured in the scope of their job and loses time or requires a medical visit, you should report the injury to your workers’ comp carrier.  If you work with Equinox and aren’t sure what to do, reach out to Bev for help.  Remember that injuries that occur in the parking lot or off of your premises may also be workers’ comp and it’s better to report than not.  Your workers’ compensation carrier will determine if the claim meets the definition of workers’ comp and work with you and your employee to pay out the claim.  Workers’ compensation coverage provides coverage for medical costs (which may not be covered by your employee’s medical insurance) and for time lost.  They also help get employees back to work.  You may be required to have workers’ compensation coverage in the state of Maine.


Disability Insurance

Disability insurance is for non-work-related injuries or illness.  It is a method of income replacement when an employee out of work for an extended period of time.  You are not required to provide your employees with disability coverage, but it’s a great way to show that you care and get them back to work.  It does not provide full income replacement.

  • Short-term disability (STD) coverage begins after 1-30 days and generally runs until the employee is medically able to return to work or until 90 days.
  • Long-term disability (LTD) generally begins after 60 or 90 days and generally runs until the employee is medically able to return to work.
  • You can offer employer paid STD, LTD, both, or neither.  You also have the option to offer voluntary disability coverage which is employee paid.

Like the workers’ compensation carriers, disability carriers will work with you and your employees to get them back to work.

Remember too that workers’ compensation and disability coverage may run concurrently with job protections such as Family Medical Leave (on the state (15+ employees) or national (50+ employees) level) and the Americans with Disabilities Act (ADA) (employers with 15+ employees).

Please reach out to our benefits ( or or commercial lines ( divisions with any questions.