Did you know that in 2019 alone, there were 888,220 nonfatal injuries and illnesses in private industry occupations? This figure doesn’t include workplace fatalities. Situations like these are deeply traumatic; for both the company and employees. They can also prove to be very expensive –financially and in terms of goodwill. This is why companies have to invest in workers’ compensation policies to protect their employees – and themselves.
What is Workers’ Comp?
Workers’ compensation was created by the National Council of Compensation Insurance, Inc. (NCCI). This is a national-level non-profit association run by insurance companies. The body is active in 36 states and workers’ compensation insurers report to this body annually. They convey their premiums and losses to them, and the NCCI in turn collects this data. They analyze it and then proceed to give certain services to the insurers.
In the US, workers’ compensation is given to employees who are injured on the job. It goes by many names, which include workman’s comp, workman’s compensation, and workers’ comp. This insurance helps employees avoid financial loss in the event they are hurt while on the job. According to the level of injury, they are either reimbursed in the form of medical care. If they’re rendered disabled, they can be eligible for payment. An injury in this sense means harm that occurs while the employee is at the office premises. Usually, it doesn’t cover injury caused to the employee if they’re on their way to or from work, but this can vary. For example, if the employee’s job profile demands them to be in many locations, or includes overtime.
The Two Ways You Can Comply with Worker’s Comp
- Very large organizations and government bodies
They choose to self-insure by getting permission from the worker’s compensation agency to pay any claims directly. They can do this without carrying any insurance.
- Smaller businesses
Small businesses must purchase workers’ compensation coverage for their employees. These cover any obligations for a work-related injury to personnel. Some organizations use a hybrid approach. This is when they hire an insurance company to look into workers’ claims for compensation. If the company finds the claims to be true, the company then pays the claim out of its own pocket.
The Workers’ Compensation Questions Small Businesses Must Answer
Q) Is workers’ compensation expensive?
It can be expensive for some. But it’s required by the law in most states in the USA. As a business owner or a manager, you are obligated to create a safe working environment for your employees. Its price is decided upon by state laws, on-the-job risks, the nature of the work undertaken by employees, and the size of your business. If you’re worried about how workers’ compensation will fit into your overall budget – don’t. Premium costs are usually closely related to the risk, so they are almost always rational and reasonable.
Q) What does workers’ compensation cover?
The coverage will vary from state to state. It can cover injuries incurred at the workplace, auto-accidents, and illnesses on the job. It can cover medical expenses, lost wages, ongoing care costs, and even funeral expenses if an employee is hurt, becomes ill, or dies due to a work-related illness or accident.
Q) What is not covered by workers’ compensation?
While these also vary, here are a few examples of what most plans don’t cover:
- Injuries incurred by an employee intentionally.
- Injuries incurred due to an employee being intoxicated.
- Injuries incurred by a fight that an employee started.
- Emotional or psychological injuries that are not accompanied by physical trauma.
Q) Who pays for worker’s compensation benefits?
Aside from Texas and New Jersey, most companies compulsorily require workers’ comp benefits. If you haven’t purchased these benefits, then you must buy insurance that covers the same. Employees aren’t responsible for paying for this.
Q) What should an employee do if hurt on the job?
They must report the incident to their supervisor at the earliest. The official report must include the date, time, and circumstances of the accident. Job-related illnesses must be reported as soon as a diagnosis by a doctor is made.
Q) How does one file workers’ compensation claims?
There’s a process that must be followed.
Step 1 – If your employee is injured, first ensure they receive immediate medical attention. Call an ambulance if necessary and take them to the emergency room. If they need a few days off to recover, grant the request as per the appropriate policies.
Step 2 – You must collect accurate data to file the paperwork. The actual data you’ll need will differ from state to state. Usually, the information you’ll need includes your company’s basic information, location, and policy number. Then the basic information of the injured employee. Finally, the details of the actual incident, such as the date, the type of injury, which body part was injured, the cause of injury, names of other witnesses, and more.
Step 3 – After collecting all this information, you must file your claim with your insurance company. Find out what the time limit is for you to file your paperwork.
Q) Are employees who get worker’s compensation eligible for Disability, Unemployment, or Social Security Benefits?
The number of programs under other benefits that the employee is eligible for can be affected if that same employee receives workers’ compensation. Workers will need to contact the company’s benefits office for the exact details.
Q) How can a company prepare itself against surprise incidents?
You need an expert to create a policy to gauge potential risks. You will first need to make a comprehensive list of all the potential hazards that can occur at your workplace. Then you must create a plan that protects your workers from them.
Q) Why do I need workers’ compensation?
If you are not prepared with workers’ comp and an accident occurs in your workplace, you may face numerous lawsuits from your employees and hefty government fines. The risk of not having this insurance in place outweighs the actual cost of the insurance itself.
In summary, workers’ compensation may be more costly than you may expect but it’s worthwhile. By hiring a trusted insurance agency, you’ll receive expert help to navigate these complex policies with ease. You’ll create a policy framework that will protect you in any event. You cannot stop accidents from happening in the workplace but you can ensure that you’re prepared for the worst!