Workers’ compensation insurance can be a complex coverage to understand. Workers’ compensation insurance is a federal requirement that every state must provide and each state determines its own methodology. It is important that business owners take the time to research and review their policies and establish workplace best practices.
WHAT is Workers’ Compensation Insurance?
The purpose of workers’ compensation insurance is to protect both the business owner and employees if an injury, accident, or occupational disease occurs on the job. Workers’ compensation insurance provides employees with medical payments and proper compensation while protecting the business owner from a negligence lawsuit. It is important to note that employers can still be held liable if gross negligence is proven.
Premiums are typically determined through a formula made up of a number of factors including payroll, benefits, and other variables. This formula, in conjunction with a risk factor classification, will help insurers arrive at the total cost of insurance. If an injury or accident occurs while on the job, workers’ compensation will help cover the medical costs, disability pay, rehabilitation expenses, and death benefits for survivors.
WHO needs Workers’ Compensation Insurance?
Workers’ compensation laws vary by state, but no business that has W-2 employees should consider it optional. In D.C., Maryland, and Virginia, where the majority of our customers reside, it is, in fact, a requirement for virtually all businesses. If a business is required to carry workers’ compensation and they fail to do so, they can be hit with costly fines, lawsuits, and even possible imprisonment for responsible executives.
While some industries have a higher inherent risk for injuries or accidents, injuries and accidents can happen anywhere and at any time. Common claims can include overexertion, slips or trips, being struck by an object, or repetitive motion injury (this can include carpal tunnel and tendonitis).
WHY your business should have an established safety program
Workers’ compensation premiums can be directly affected by the number of workers’ compensation claims submitted. By investing some time and money into developing or enhancing a company safety program, you can prevent accidents from happening and also positively affect your business’ experience modification rating. Outside of costs and ratings — and most importantly — a workplace safety program provides employees with a safer and more stable work environment.
Wondering where to start? A great first step for developing a new program or enhancing your current one is to conduct an internal workplace safety audit. This audit will allow you to identify risks, hazards, and areas for improvement within the workplace. Once you have a general idea of where your business currently stands, you can start assembling rules and procedures to address the safety concerns identified in the audit. It is also important to have a clearly identified and accessible accident procedure plan.
Other safety program components to consider include compiling a safety handbook for employees, holding yearly safety trainings, and even implementing a safety incentive program for employees.
It makes sense that worker’s compensation insurance would be important for businesses. That way if someone gets injured on their premises, they can get support to help pay for the medical bills! If they don’t have the insurance, there’s a good chance that they could risk getting sued.
I just wanted to thank you for helping me learn more about workers’ compensation. I’m glad that you explained that the laws of workers’ compensation could very by state. Maybe it could be beneficial to know what the laws are in your state, just so that you are fully aware of the details of it.
Since the laws do vary by state and can be complex, we highly recommend consulting with your insurance agent directly to make sure you have all the proper coverages.
I’m glad you mentioned that the purpose of workers’ compensation insurance is to protect both the business owner and employees. If an injury were to happen both parties would be at risk. I can see why it would be a really good idea to make sure to always have workers’ compensation for any business practice.
You made a great point about how worker’s compensation insurance can cover you in case anyone slips and gets hurt. My brother and I have been thinking about starting a business in the future. It would be smart to have worker’s compensation coverage because it would protect us from small accidents like slipping.
I like how you talked about what workers’ compensation is and how it protects both employer and employee. My sister recently hurt her back at work and is receiving workers’ comp, so I was wondering what it was and how it works. Thank you for the information about how it provides the employee with medical payments and proper compensation while protecting the employer from a negligence lawsuit unless gross negligence is proven. Great article!
My brother was hurt while he was at work and he lost his hand. It was mentioned here that he can’t claim disability benefits from the company if he resigns. Moreover, the worker’s compensation insurance will also cover most of the bills when injured.
It is interesting that you say workers’ compensation protects both the business owner and the employees in case of accident or injury that occurs on the job and it provides employees with medical payments and compensation. If I was a business owner I would definitely get this insurance because it would protect me from a negligence lawsuit and give me peace of mind that my employees will get the help that they need if they are injured. Also, it makes sense that investing time and money in developing a safety program can prevent accidents in the first place and thus save money in the future.
I knew that worker’s compensation cases could cover slips or falls, falling objects, or overexertion, but I didn’t know it could cover repetitive motions like carpal tunnel and tendinitis. This is probably something I should keep an eye on since my husband works in an office on his computer on a daily basis. This is really helpful information.
I really like how you talk about why a business should have an established safety program. This is totally true because in the case of an emergency or someone is hurt while working, it is important that they can be taken care of after suffering injury and being unable to come to work. Hopefully, all businesses are taking this into consideration and applying workers compensation to their work policies.
Worker compensation’s insurance is important, one has to set them up so as not to get sued in case an employee gets hurt on the job if nothing else. It’s also important for the employee as they can get lost income as well as cover medical expenses. There should always be a good source of information to consult when dealing with this, especially for small business owners.
I’m needing to get help getting workers’ compensation! Thank you for letting me know that laws vary by state. This knowledge will help me figure out what I need to do, I may get help from an attorney or someone who knows what they are doing.
I really like the information that employers can still be held liable if gross negligence is proven. That’s why workplace safety is important and you never want to go to work on anything. Thank you for your information on what workers compensation is.
It sure is nice to know that developing carpal tunnel syndrome qualifies you for a workers’ compensation claim. My daughter as a graphic designer for an ad agency, and she is frequently overworked and often has to deal with tight deadlines. Her wrists and arms certainly took a lot of wear in a span of a year, and she thinks she has developed this condition. I’ll be sure to advise her to go look for a worker’s compensation lawyer should the company refuse to acknowledge her claim.