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How Does Workers Comp Work?

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An accident in the workplace can be devastating for both your employee and you as a business owner. It can come with piles of medical expenses and a series of worries. For these reasons and many others, you’re going to want to have a workers' compensation insurance policy at the ready. Workers’ comp will offer your employee financial support following an injury or illness that occurred while they were working. Such insurance covers several instances, like slip and falls, and provides some very valuable help to you and your employee. Outlined in this piece are the ins and outs of workers' compensation insurance, with information ranging from who exactly needs workers'’ comp and the claim filing process.

What is Workers' Compensation Insurance?

Workers' compensation insurance, also known as workers' comp, is an insurance plan that offers financial benefits to your employees after they are injured in a work-related accident or contract an illness while on the job. Workers’ comp will also send benefits to an employee’s beneficiaries should their accident at work be fatal. The purpose of this type of insurance is not only to support your employee but keep you, as the employer, protected from being sued for an accident. It is considered a “no-fault” program, meaning no matter who caused the accident, the hurt employee will receive benefits. There are a few exceptions to what is covered under workers' comp but this is a general idea of what policies feature. Essentially, as long as the accident happened at work, an employee will receive compensation.

Who Needs Workers' Comp?

State requirements for workers' comp can vary. Many states mandate this coverage for companies with at least one employee. For this reason, it is highly recommended that you purchase a policy the moment your company makes its first hire. However, some states do not require workers' comp until your company hires two or more employees. Others may not even require it if you are in a certain industry. But that should not be an excuse to leave your company’s finances and your employees at risk. It would not be wise to put off purchasing coverage. It only takes one accident to land you in financial trouble.

There is one state that doesn’t have any workers' comp requirements on the book: Texas. It is up to employers if they want to provide it. But keep in mind, failing to have this coverage can be detrimental to a business. It would be wise to include a workers' comp plan when you are in the start-up phase of your company. Operating without it in states that do require it can be seriously damaging as well.

How Much Does Workers' Compensation Insurance Cost?

The cost of a workers' compensation insurance policy depends on a variety of factors. On average, companies pay around $600 per year for a policy. That comes out to be about $50 a month. But this number can differ not only state by state but also from business to business. Your company’s rates can easily be below or above the national average. What your premiums are set at depends on the following factors:

  • The state you are operating in
  • Number of employees in your company
  • The industry you are in and the type of work your employees do
  • Annual payroll amount
  • Your company’s safety record
  • History of insurance claims

What Injuries Does Workers' Compensation Cover?

As previously mentioned, workers' comp offers employees medical coverage after injuries and illnesses that are a result of an accident at their workplace. But what this exactly entails can be specific. Listed below are examples of injuries that workers' comp policies will cover.

  • Back injuries due to strain
  • Slipping and falling
  • A car accident while making a delivery
  • Carpal tunnel
  • Damage to lungs due to chemicals

What Injuries Does Workers' Compensation Not Cover?

While workers' comp will assist employees after a number of incidents, there are still some areas where insurance will not payout. Usually, after some investigation, the true circumstances surrounding an accident come to light. The following instances will not be covered by workers' comp:

  • Injuries caused to self on purpose
  • Off-work at time of injury
  • Violating law at the time of injury
  • Intoxicated at the time of injury

How to File a Workers' Comp Claim

Filing a workers' comp claim comes with a few different steps. Handling insurance of any kind can get overwhelming, so outlined below is a guide to how you should go about filing this type of claim with your insurer. Some steps, like those regarding your employee seeking medical treatment, may need to get shuffled around depending on the severity of the accident.

1. Employee reports work injury

Make sure you inform your employees that they have to report any injuries immediately. Before you file claims with your insurer, there are some pieces of paperwork your employee will have to fill out. This report will include information like the date, time, and events surrounding the injury. Try collecting these facts as soon as possible. If your employee needs medical treatment, tend to them first.

2. Advise the employee to seek medical treatment

After your employee completes their report on the accident, encourage them to see a medical professional. The health care provider who assists them will fill out a medical report which is then to be passed along to the insurance company. Your insurer will need to see what treatments your employee underwent in order to decide whether or not to cover the claim.

3. File a claim with the insurance company

Employers are responsible for filing the workers' comp claim with their insurance company. Typically, you will have to send documentation regarding the employee’s report and any other forms for your state’s workers' comp board. Depending on the state you are in, you are required to report any injuries your employees sustain regardless of whether or not they are seeking workers' comp benefits.

4. Wait for approval

Now, it is time to wait. Your insurance company will review the paperwork and decide whether to approve the workers’ comp claim. In instances where the claim is approved, your employee can accept what the insurer offers or try to negotiate for a larger settlement. If this claim has been denied, your employee can appeal the decision. This would be the time for them to look into hiring a workers' comp lawyer for navigating the appeal process.

5. Welcome the employee back

Once your employee is healed and ready to come back, they will let you and the insurance company know. You should slowly start transitioning your employee back into their work. Begin with certain tasks before throwing them right back into their role. They may not be 100% recovered when they come back, and you do not want to push them. After a couple of weeks, they should be ready to resume their full position. Don’t forget that during their absence, you may need to hire a temporary replacement. You should anticipate such training following an employee’s medical leave.

Benefits of Workers' Compensation Insurance

Workers' compensation insurance policies assist both employees and employers. Basically, everyone wins when a company sets a little aside every month for this insurance policy. Outlined below are the benefits you can see as an employer, along with how your employees will be supported following a tragic accident at work.

Benefits for Employers

As previously stated, workers' compensation doesn’t just offer benefits for employees. While employers may not receive money, a workers' compensation policy helps protect both your company and you as an owner. Without the proper coverage, you will be directly responsible for any medical costs and lost wages as a result of getting injured on the job. If your employee needs surgery or requires rehabilitation due to being hurt at work and you do not have workers' comp, you will have to cover expenses, putting you and your company’s finances at serious risk. Obtaining the proper workman’s compensation policy will help avoid this.

Benefits for Employees

The full extent of benefits employees are offered following an injury or sickness at work can vary. It will depend on things like the nature of the injury, state laws, and what has been outlined in the insurance policy. In general, workers' comp will cover medical expenses, a portion of lost wages, rehabilitation costs, disability benefits, and funeral expenses. These will be paid out no matter what assuming that it does not fall under one of the excluded instances as outlined in a previous section. Payments will be crucial for employees as an injury or illness of any kind can be damaging financially.

Prevent The Need to File a Workers' Comp Claim

Just because you have workers' compensation insurance does not mean you should let your employees run wild. But while you can never fully prevent accidents from occurring, there are some steps you can take as an employer to try to make the workplace safer for everyone. Not only will this protect your workers, when you file fewer claims, your workers'’ comp premiums will also be lower. Outlined below are some steps you can take to keep your employees safe at work.

Safety Training

Set a regular schedule to conduct safety training. This should be done monthly, if possible. During this training time, remind employees about the proper safety procedures and how to conduct business in the workplace. This could be something as basic as retraining them on operating machinery or how to safely lift heavy boxes. Whatever areas of your business can pose a threat to your employee should be covered in these safety training sessions. It seems tedious, but you never know who could use a refresher.

Open Communication

As a business owner, you should maintain an open-door policy with your employees. You want to appear approachable and communicative. This will help your workers feel more comfortable coming to you when they have concerns. Opening that line of communication can help keep your employees safe. If there is a safety concern, but your worker does not feel comfortable coming to you about it, someone will eventually get hurt. Always be there, ready to listen to concerns and address them as you see appropriate.

Return to Work Programs

After your employee suffers an injury and is off work for a while, bringing them back can be a bit intimidating. Having them jump right back into their old job may be overwhelming given what they have experienced. Due to that, it is highly recommended that you implement a return to work program. Return to work programs helps your employee ease their way back onto the job. They may take on lighter roles as they continue to recover. This will help them get readjusted and allows the worker to pull in their regular wages (as opposed to the reduced ones they saw on workers' comp). But it is important to never push your employee to return before they feel comfortable enough.

Inform Employees About Workers' Comp

Do not try to hide workers' comp benefits from your employees. Be open about the policy and provide workers with information on the coverage available to them. Hiding it helps no one. Make sure all workers, new and seasoned, have a good understanding of their rights under the policy.

Do You Need a Lawyer For a Claim?

You should consider consulting a lawyer following any kind of worksite injury. The world of workers' compensation can get overwhelming, especially if there is a problem with your claim or your employer disputes it. It would be best to have someone who is knowledgeable in the field on your side. Bringing on a lawyer is also recommended if you decline the workers' compensation and go the personal injury lawsuit route. There are lawyers who specialize in workers' compensation cases that can be of great assistance in these circumstances. An injury at work is no small thing, and you want to make sure you are receiving all the support you deserve.

Ready to get your business insured? Contact Insurance Navy for a free business insurance quote today. One of our expert agents will happily assist you in finding the best coverage at the best rates. You can request a quote online via our website or mobile app. We can also be reached at 888-949-6289.

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