Workers compensation and employer's liability insuranceWhat do a bee sting, a dismembered thumb, and electrocution have in common?

They’re all injuries that could happen on the job.

If you sustain an injury on the job and can’t work because of it, in many cases you might be entitled to workers’ compensation.

Workers’ compensation coverage (“workers’ comp”), combined with employers’ liability insurance, is a no-fault system that provides medical benefits to an employee who has a work-related accident, injury, or disease. It will also replace a certain percentage of the injured worker’s wages.

Workers’ comp claims can be straightforward or complex, depending on the injury.

One of our clients is a surveyor whose employee had to go to the ER after being stung by a bee. That workers’ comp claim was resolved pretty simply.

Another client, who installed carpets for a living, had an employee file a claim after a back injury left him unable to work. That case required a ton of back-and-forth negotiation and documentation, and when all was said and done the employee was awarded $200,000.

One big reason to have workers’ comp and employers’ liability insurance? Your company may be able to avoid a lawsuit from the injured worker.

Workers’ Comp: Eligibility

What kind of injuries or illnesses would make a worker eligible for workers’ comp benefits?

  • A repetitive stress injury, like carpal tunnel syndrome
  • A debilitating illness, like cancer, caused by environmental pollutants
  • An accident or injury from a specific on-the-job incident, such as falling from a ladder

Workers’ Comp: Policy Pricing

Workers’ comp is priced based on the nature of the business, the job title of the employee, and the overall company payroll. If you’re a business with a high risk of injury, your premiums will be higher.

Workers’ Comp: Audits and Subcontractors

Typically, audits are done annually to determine if the premium being paid by the employer is adequate for the risk the workers are taking to complete their jobs. An audit involves payroll documentation as well as proof of insurance for subcontractors.

Insuring subcontractors can be tricky. The insurance carrier may charge the company for a workers’ comp policy for contractors who are not technically employees. If you’re the employer, consult with your insurance agent on your specific circumstances to ensure there are no surprises at the time of audit.

Workers’ Comp: Advice for Employees

If you’re injured on the job, take the following steps:

  • Consult a physician immediately, even if it’s only a minor injury. A physician must confirm if an injury is classified as a workers’ comp claim.
  • Discuss the incident with your employer. Disclose what medical treatment was provided and when.
  • Keep a paper trail. You’ll want to have all the documentation regarding your injury and treatment.
  • File a claim with your employer. Typically, a claim should be filed within a year of the incident. If you have any reason to believe that you are at risk for injury or illness due to work-related conditions, don’t put your benefits at risk by waiting to file a claim.
  • Consider a second opinion. The insurance company will require that you see its appointed doctor to determine a diagnosis. But you may wish to see other physicians and specialists as well. Be sure to get medical diagnoses and opinions in writing.

Workers’ Comp: Recommendation for Benefits

After your medical examinations are complete, the insurance company will make a recommendation for your workers’ comp benefits under the company policy.

Benefits may include roughly two-thirds of your regular income, which would be paid tax-free; medical expenses; and vocational rehabilitation.

If you need to dispute or appeal a claim, consult with an attorney to determine if it makes sense given your circumstances and how to proceed.

Workers’ Comp: Advice for Employers

  • Call your agent or the insurance company as soon as possible. You’ll need to initiate a claim on behalf of the company and make a statement.
  • Keep your workers’ comp policy up-to-date. Workers’ compensation coverage is mandatory in most states. In addition to finding yourself in hot water if an employee files a workers’ comp claim and you’ve let your policy lapse, you could face hefty fines.
  • If you decide to switch insurance carriers, make sure your policy dates coincide. In some jurisdictions, lack of coverage could result in criminal penalties in addition to fines.
  • When it comes to workers’ comp, follow the letter of the law. Remember that workers’ comp is a state-mandated insurance coverage. Don’t take a chance on incurring penalties if you’re caught without the proper coverage. Each state has its own laws and requirements, so consult with your broker or your local workers’ comp board.

Linda Rey is a licensed insurance agent at Rey Insurance with a broad spectrum of expertise in life, accident, health, property and casualty insurance as well as retirement planning and college funding strategies.
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