Being a business owner has never been easy, but with the current economic situation, it’s more difficult than ever. Aside from primary business responsibilities, business owners are also responsible for the safety and wellness of the employees they hire. If you’re a business owner, then the easiest way for you to ensure it is safe is choosing a workers comp plan for your organization.
Even if you have a plan, you might want to consider switching to a better option is always a good idea. In today’s article, we’ll cover the basics of workers comp and what to expect. Hopefully, this information will help you make more informed decisions in these trying times.
What is Workers’ Comp?
First, let’s start by giving you an idea of what workers comp is. Workers comp is a publicly sponsored insurance system that ensures a worker gets compensated for any harm or injuries that occurred at work. Different countries implement it differently; in the United States, each state handles it at the state level.
Let us illustrate workers comp with an example—if an employee of American Airlines is injured while handling heavy luggage; the company has a great workers comp policy that pays the medical fees for the injured employee and any missed wages. But if that same employee got injured while driving to work, then he/she won’t be covered by workers comp.
When businesses implement a worker’s comp policy, the employees give up the right to sue the employer. As thus, it serves as a safety cushion for both employers and employees. Remember that workers comp doesn’t fall under disability insurance or employee benefits.
Why Businesses Need It
Even if workers comp might seem like a liability to a new business owner, it’s actually really important for the future of your business. The most critical reason workers comp is beneficial to business owners is it protects the company from legal action and substantial medical payments.
Besides, you couldn’t avoid it even if you wanted to since it’s compulsory in every state. The rules and regulations might differ from state-to-state, but the basic principle remains the same. Without a proper workers comp policy, when accidents at work happen, legal complications tend to be the norm. If you’re unlucky, you might end up paying a fine of up to one hundred thousand dollars, face jail time, or a combination of both.
Having a worker’s comp policy for your business increases employee satisfaction and retention levels. Click here for more information about workmen’s comp laws in detail.
What Does Workers’ Comp Cover?
Now that you have a clear idea of why workers comp is necessary let’s take a look at the aspects covered under workers comp. As mentioned above, different states have different regulations, but the following benefits are covered by most:
- Medical expenses: Any injuries or illnesses that occur in the workplace, worker’s comp with cover.
- Missed wages: Any wages lost due to illness recovery or other paid leaves, workers comp will cover.
- Ongoing care: If the injury or illness incurred by the employee is long term, then the ongoing medical costs are also covered under workers comp.
- Funeral costs: Though less common, deaths do happen in certain rare cases, especially in heavy industries. If an employee dies at the workplace, then you’re liable to pay the funeral costs.
- Repetitive injury: Certain injuries like Tendinitis, Bursitis, Ganglion cysts do not suddenly happen. Years of repetitive stress motions at work cause these injuries. If your employees are affected by these, then they are covered under workers comp.
- Disability: Certain unfortunate accidents can cause employees and workers to get permanently disabled. Though you don’t have to take full financial responsibility for them, you’re still liable for the medical bills and certain employee benefits.
How Settlement Works
If a worker’s comp situation does arise in your business, you need to know how the settlement process works. The settlement process may differ by state, but in most cases, there is a common outline. Before doing anything, first, take care of the medical needs of the employee.
Provided that the accident or injury isn’t anything major, your employee will then need to file a workers comp claim to their legal or union representative. The representative will then forward the claim to you. During this stage, you should be actively involved and stay in touch with your employee’s representative to avoid legal problems.
Once you file your claim, you need to pass it to your insurance company, who will decide whether to approve it or not. Once approved, your employee will get the compensation benefits until he/she is fit to get back to work.
Workers comp is an essential aspect of your business to consider, now more than ever. If you’ve launched a new business or are already struggling with the retention of employees, then choosing a good policy can go a long way to ensure the loyalty of your employees.