No matter how safe a workplace is, accidents can always happen. Injuries, illnesses and fatal incidents can happen on the job in just about any industry or profession. Fortunately, workers’ compensation laws and programs help protect workers in the United States should any of these happen in their workplace.
What is workers’ compensation?
Workers’ compensation is a financial payment made to an employee who suffers a workplace injury or becomes seriously ill or dies while on the job. It is an old concept, with roots in several ancient civilizations. The purpose of these early workers’ comp laws was to provide workers with money to compensate them for a serious injury, usually losing a body part.
The modern workers’ comp system in the United States traces its roots to Europe in the late 1800s, when the rights of workers began gaining importance. It has also expanded beyond just compensating employees for serious injuries. Workers’ comp systems now assist employees while they recover and if they are permanently disabled in the workplace.
5 Facts about workers’ comp you should know
The idea behind workers’ compensation is simple, but the reality can be complicated. Here are five facts to help demystify the process:
1. Workers’ Compensation insurance is probably required in your state
Except for Texas, all states require most small businesses to carry Workers’ Compensation insurance.
Workers’ Compensation insurance provides benefits to your employees when they make a claim against your workplace for injury or illness. These benefits cover:
- Medical bills
- Replacement wages
- Disability support
- Death benefits
Typically, small business owners must have a Workers’ Compensation policy in place before they hire their first employee. In some cases, even sole proprietors are required by law to carry a policy. Workers’ comp laws vary from state to state, so always check your local requirements to ensure you are properly covered.
2. You should make a workers’ comp claim as soon as possible
Filing a workers’ comp claim with your insurance company is an essential step towards getting your employees the support they need. It can also save you from out-of-pocket expenses, such as covering an injured employee’s paycheck while they recover.
You may also be legally required to make a claim as soon as possible. For example, employers in Florida must report a workplace injury to their insurer within seven days of learning about the incident. A Workers’ Compensation insurance claim can be denied if you do not report it on time, potentially leaving your business open to a lawsuit.
3. Providing info can help smooth the claims process
The faster a Workers’ Compensation insurance claim is resolved, the better for your employees and business. There are ways you can help the claims process go more smoothly and get your employee the financial support they need as quickly as possible.
After a workplace injury occurs, it’s important to collect and save evidence. This may include photos of the scene, testimony from witness, or the equipment that was being used. Your insurer will use this information to process the claim. Providing them with the evidence and other information they need in a timely fashion will help remove unnecessary delays from the claims process.
4. Not all types of claims are covered
While Workers’ Compensation insurance covers a wide range of workplace injuries and other expenses the business may face, there are some events that are not covered. These often include:
- Injuries caused while intoxicated or on drugs
- Injuries sustained by independent contractors
- Injuries claimed after an employee is fired or laid off
- Wages for replacement workers
- OSHA fines
Always read the policy wording when buying Workers’ Compensation insurance to understand what is and isn’t covered by your policy. If you have any questions, your insurance agent or your insurer’s customer support team can help.
5. Workplace safety can help reduce claims
Workers’ Compensation insurance provides an important safety net for your employees and your small business. However, avoiding workplace injuries should be a top priority for all employers. An unsafe work environment can also help increase your Workers’ Compensation insurance premiums.
Creating a culture of safety at work starts with you. Make sure your business has workplace safety guidelines to help prevent injuries and an emergency action plan for if things do go wrong. Schedule regular safety training sessions to educate and refresh staff and encourage them to speak up if they observe unsafe activities at work.
Find the right Workers’ Comp insurance for your business
Understanding local workers’ comp laws is an essential part of running a small business today. The right Workers’ Compensation insurance policy not only helps you stay on the right side of the law, but also protects your employees and your business.
BizInsure helps you find different business insurance policies you may need, including Workers’ Compensation. Compare multiple policies from multiple insurers and buy in minutes, so you can get back to running your small business.