Employers and business owners who operate from specific business premises are required to purchase workers' compensation insurance which pays for coverage of employees that suffer workplace-related illness or injury. Without being insured, the employer/business may be held liable to pay for claims from their own assets. In addition, the employee may directly sue the employer in court as you will not be protected by insurance. If you're just starting a business, below are some answers to basic questions you may have about workers' compensation insurance and benefits:
Does workers' compensation cover all injuries?
Workers' compensation claims often don't regard the party at fault, i.e. the claim may be paid even if you (employer) aren't to blame. In addition, it covers disorders developed over time for doing some injurious and usually repetitive activity e.g. back pains, Carpal Tunnel Syndrome etc. Specific laws differ according to your state regulator. However, most states free the employer if there is proof of deliberate or reckless action by the employee e.g. operating machinery under influence of alcohol or drugs, deliberate attempts to injure oneself, if there was deliberate violation of company policy etc. You can ask for alcohol or drug tests if suspected.
What does insurance pay for in workers' compensation claims?
Workers' compensation insurance is intended to cover the cost of medical treatments, rehabilitative care (including related costs like transport) and lost earnings (percentage of their pay) of an employee injured or taken ill in the course of work. In addition, permanent injuries, need for employee retraining or death attract additional payments.
Workers' compensation isn't the same as suing the employer in a court of law: workers' compensation programs have fixed claimable amounts according to the different regions, and one cannot be compensated for pain and suffering (this is only applicable if directly suing the employer). The employer can be sued if there was deliberate/negligent action/inaction that resulted in the injury. Suing waives the right to claim workers' compensation and vice versa...
Does my line of business affect my premiums?
Yes. Certain employers attract higher premiums for their insurance cover because they are considered high-risk. High-hazard businesses like construction and manufacturing for instance are more likely to have workplace injuries than office-based businesses. Premiums can also be revised upwards or downwards at the time of renewal depending on how may claims were filed in the previous period. Therefore, lowering your business environment risk can lower payable premiums, as can other interventions.
How can I lower my costs?
Ensuring the highest standard of safety in the workplace is the best way to prevent workplace injury and the resultant costs. This includes the following:
- Providing safety equipment, safety protocols and training programs for employees, especially those in high-risk lines of work
- Taking care to recruit qualified and trained personnel – some employers hire underqualified personnel to reduce wages/salaries, but such personnel will be more accident-prone
- Proactively implementing return-to-work programs to enable injured works get reassimilated into the workplace in the shortest time.
For more information, contact a commercial insurance company, like Westralian Insurance.