Your business’s workers’ compensation policy protects against lawsuits filed by injured employees. The trade-off is the cost of these policies eats into your profits. Every workers’ compensation policy is slightly different, and it is important to know what it does and does not cover.
Essentially, workers’ compensation covers injured or ill employees in job-related cases. These policies pay for:
A workers’ compensation policy will not pay these costs for injuries or illnesses unless they are work-related. State laws vary regarding workers’ compensation, but any business with more than a certain number of employees (typically five) must carry this insurance and keep the policy current. It comes with a significant level of protection – injured or ill employees, in most cases, are barred from filing a personal injury lawsuit against the business but can expect medical care and some percentage of the lost income.
Unfortunately, the workers’ comp system is also prone to fraudulent claims. An estimated $30 billion in fraud occurs every year, but most workers’ comp claims are legitimate. A claim filed and paid has an impact, raising the cost of premiums. It makes sense to carefully evaluate any workers’ compensation claim and ensure that you are not the victim of insurance fraud if you have doubts about the validity of a claim. If you do, you must notify your insurance carrier of your concerns so that they can investigate. As an employer, you have the right to dispute a claim under the processes required in your state.
Business owners in most states will have two options for purchasing workers’ comp insurance: a State fund or a private insurance company. A few states offer only a state fund. The cost of this insurance is generally a big bite out of profits, so shopping around makes sense. Meet with a local business insurance agent to get multiple quotes before you commit. The issues to evaluate in a decision include:
To make your company’s premiums more affordable, including shopping for a better deal with the help of a local workers’ compensation insurance agent who has access to the latest deals, which can change from year to year. Essentially, the fewer claims, the lower your premiums. It is in your company’s best interests to implement a customized workplace safety program with regular seminars and workshops for your employees. Fewer claims mean lower premiums.
The job market has changed, with a low national unemployment rate. The best employees look at several issues when applying for a job, including the benefits package you offer. In workers’ compensation, how medical care is provided can vary. Some employers require injured workers to go to a specific medical provider or clinic, while others allow them to visit their own doctor. When planning your workers’ comp insurance, consider it part of the benefits package you offer your employees and that the best employees in the current job market are fielding many job offers – make yours among the best.