Understanding Workers’ Compensation

As the owner of a business, you must understand your responsibility for workers’ compensation when injuries occur in the workplace. But what is workers’ compensation, and what do you need to know about providing it?

Here’s an overview of the workers’ compensation process.

Covering workplace accidents

Workers’ compensation insurance is the policy that pays out your employees’ medical and rehabilitation expenses if they suffer an injury or illness in the workplace or in the course of their job duties. If that worker is unable to come in to work while recovering, workers’ compensation can also cover their lost wages during that time.

Almost every state requires business owners to have workers’ compensation insurance, though the requirements may vary from state to state when it comes to how large a company must be for that requirement to exist.

Your business will be responsible for making regular workers’ compensation insurance payments throughout the year. The cost you can expect for your premiums depends on how dangerous the work is. For example, office work will not be nearly as expensive to insure as construction work or mining jobs.

If you do not have workers’ compensation in place, you could potentially be subject to fines as a result of your lack of compliance. In severe cases, business owners can see jail time if they refuse to comply with the required workers’ compensation process for their state. If an employee suffers an injury and there is no workers’ compensation insurance to cover the costs, your business may be responsible for covering those expenses—and your company could be sued by the employee to recoup them.

What to know when employees file a workers’ comp claim

You must inform all employees about your workers’ compensation insurance coverage. Proper notice includes posting information around the premises, and putting that information in any employee handbooks you distribute. You should also openly answer any questions employees have about workers’ compensation coverage, providing specific information about what the policy covers and the processes they must follow to make a claim.

If any employee is injured or becomes sick in the course of their work, it is your responsibility to provide them with the claim form, and it is your responsibility to submit that form to your insurance company. In some cases, the employee might also be required to file a separate claim—you can check with the U.S. Department of Labor about this. If the employee’s claim is approved, the insurance company will handle the distribution of benefits, and you do not have to worry about taking any further action from there.

Of course, the best-case scenario for everyone is that none of your employees ever get injured or fall sick on the job. But without workers’ compensation insurance, a work-related injury to an employee could financially devastate your business, so it is critical you make the investment in a workers’ comp insurance policy.

For more information about the workers’ compensation process and what you should know, contact the team at Windsor HR Services, Inc. today.