How Does Workers' Compensation Work?
Workers’ Compensation Insurance provides compensation for an employee's medical bills, lost wages, or rehabilitation, if they are injured on the job. Some policies also provide death benefits if an employee is killed while performing a job-related duty. Though you usually aren’t required to carry coverage for yourself if you’re an employer or freelancer, it may be advantageous in certain situations:
- A client contract requires proof of Workers’ Comp coverage for yourself.
- You want some level of income protection if an occupational injury keeps you from work.
Workers’ Comp can also cover an employer’s legal expenses if an employee decides to sue for damages caused by an occupational injury, illness, or accident.
Workers’ Comp requirements vary depending on where you live. To make sure your business has the appropriate coverage, work with an Insureon agent who specializes in insurance for your industry.
How Workers’ Compensation Insurance Helps Your Business
No workplace is completely safe or without risk, even with adequate preparation. According to occupational injury data from the US Bureau of Labor Statistics:
- The private industry experienced 892,270 occupational injuries and illnesses in 2016.
- For these injuries, the median days away from work was 8 days.
It's the employer who is ultimately responsible for worker injuries, which is why most states require employers to carry Workers’ Compensation coverage. Without proper coverage, you might have to pay out of pocket for an employee’s medical treatment, as well as hefty state fines.
To determine which type of coverage you need, check out our state-by-state guide to Workers' Compensation requirements and talk to your insurance agent.
How Workers' Compensation Claims Work
As soon as an employee is injured or develops an occupational illness, they should report it to you. Each state has a different reporting period. Make sure your employees know they have to report within the specified reporting period or they might not receive benefits.
After an injury is reported, business owners should follow these steps:
- Receive proper paperwork. It's your job to provide the injured employee with information about the claims process, their Workers' Comp benefits, their rights, the appropriate forms, and the business’s insurance details.
- Direct the employee to an approved healthcare professional. Your employee should seek medical assistance immediately – any delays can put their benefits at risk. The doctor will provide a medical report to file along with the employee’s injury claim.
- Make sure the employee files the claim. Along with any state-mandated paperwork, forms, and medical reports, the employee will file a claim with your insurance company. Pay attention to reporting deadlines. It's also good to know that you may be required to report any workplace injury or illness, even if it’s not eligible for Workers’ Comp benefits.
- Check to see if the employee received benefits. Your insurance provider will either approve or deny the claim. If approved, your employee will receive benefits. Most policies help pay for medical expenses, rehabilitation costs, and two-thirds of their wages if an employee is unable to work for a certain amount of time.
- Prepare the employee to return to work. Before an employee returns to work, they may have to submit additional paperwork acknowledging they’re able to work. As their employer, you are responsible for “re-training” the employee and taking precautions to prevent similar injuries.
For an in-depth look at the claims process, read “How Do I File a Workers’ Comp Claim?”
Tips for Preventing Workplace Injuries
A Workers’ Compensation Insurance policy works by saving you from paying employee injury claims out of pocket. But there are steps you can take to minimize the impact of occupational ailments in the first place. Be sure to:
- Offer informational brochures about your Workers' Comp plan. Make these brochures part of your employment packets and training materials when you hire a new employee. Review this information with all employees, especially if your policy changes.
- Conduct regular safety training. Prevent workplace injuries before they happen by reinforcing best safety practices and conduct. Train employees how to properly use equipment and offer appropriate safety or ergonomic gear.
- Keep your door open. Let your employees know that they should come to you with questions. That way, if they have safety or health concerns, you can take corrective measures before someone gets hurt.
Compare Workers’ Comp quotes today. Complete Insureon’s easy online application to compare rates from top U.S. insurance companies.