The Ins and Outs of Workers’ Compensation

By Edith Gates, CISR

Georgetown Insurance Service, Inc.

Silver Spring, MD

Accidents happen. Regardless of how stringent your safety measures are, there is no possible way to completely eliminate the threat of workplace accidents. That’s where workers’ compensation insurance comes in. Having workers’ compensation isn’t just an option, but a necessity.

What are the benefits of workers’ compensation insurance?

In the case of an employee accident and subsequent claim, workers’ compensation insurance can provide your business with following benefits:

• Access to professionals who will help you through the claims process. These professionals can include adjusters, case managers, and attorneys to represent the insured’s interests.
• Financial stability through the payment of medical bills and loss of wages for an employee who is unable to work due to an on-the-job accident. These are usually expenses that are unforeseen in a business’ budget, can add up quickly, and can potentially result in the financial bankruptcy of a company without insurance.

What should you do if an employee is injured?

When an employee is injured, no matter how seemingly insignificantly, it is important to cover all of your bases each and every time. Here are some tips on how to respond:

• Have the employee seek medical attention right away. If an employee puts off visiting a doctor, they could worsen their injury and be out of work longer.
• Fill out the appropriate form reporting the injury. All companies should have some type of “first report of injury” form to fill out when a work place accident occurs. It is important to fill this out while the incident is still fresh in your mind.
• Send the form to your workers’ compensation carrier or insurance agent right away. A claim can take up to 24 – 48 hours to be set up. This will expedite the authorization process if your employee needs to seek additional medical treatment. Insurance companies also like to be involved from the start of a claim since this can cut down on the overall claim costs.

Things to avoid

Please do not engage in any of the following methods. They can — and usually do — backfire.

• Don’t prolong reporting an incident and getting a claim started. This can cause an employee’s injury to worsen and prevent them from getting timely medical treatment. This can also cause their medical bills to go unpaid for longer than necessary, resulting in frustration for the employee — especially if they have overdue bills and have yet to receive compensation for lost wages. Frustrated employees are typically the ones who seek legal representation and any type of lawsuit will cause the claim to stay open longer and cause your costs to increase.
• Don’t try to pay an employee out of pocket to avoid a claim. This can often cause employees to “extend” their recovery time and stay at home longer. Insurance companies usually only pay a claimant a percentage of their full wages. This percentage will vary based on state. This reduced rate will often encourage employees to return to work sooner.

Proactive ways to avoid accidents

While we know accidents are unavoidable, that doesn’t mean you can’t take preventative measures. As an employer, it is your responsibility to provide your employees with a safe working environment. Some ways you can prevent possible accidents and strengthen your work environment include:

• Drug testing. It is important, particularly in high-risk industries, to include a drug test as a routine part of your hiring process. It is also crucial to conduct a drug test AFTER an injury occurs.
• Conduct regular safety classes. Make safety an important part of your corporate culture. Not only should you conduct classes, but make it a priority to enforce the rules and regulations introduced in those classes.
• As appropriate, enforce the use of safety clothing and protective gear. These could include goggles, hard hats, proper footwear, and safety vests.

By taking these steps, you can best protect your company, ensuring its financial future is not threatened by workers’ compensation claims.