7 Questions Employers Have about Workers’ Compensation Insurance
Workers’ compensation insurance is paid by employers to employees who are injured or ill because of job-related activities. When an employee is injured or becomes ill due to their job, the employee is able to file a workers’ comp claim. Once the claim is reviewed an employee will receive compensation if the claim is accepted.
This post covers seven of the most common questions employers have about workers’ compensation insurance.
1. Who benefits from workers’ compensation insurance?
Both employers and employees benefit from workers’ compensation insurance.
Employers benefit because in most cases, an employee doesn’t pursue a lawsuit for injuries or illnesses that occur due to job-related activities if workers’ comp is available.
Employees see the biggest benefit from workers’ comp because it provides them with benefits when they’re unable to continue their work because of job-related injuries or illnesses.
2. Are all employers required to carry workers’ compensation insurance?
Yes! All employers must carry workers’ compensation insurance, but the level and type of coverage required varies by state.
Some things employers need to look out for in their state of business include the following:
- Who is covered as an employee?
- What injuries are covered?
- What proof is required to make a claim?
- What is excluded from coverage?
- What is the timeframe for making a claim?
- What defenses do employers have against claims?
3. What is covered?
Workers’ comp covers the wages of workers who are unable to work due to job-related injuries or illnesses. Medical bills and things such as job retraining are also covered.
Work-related injuries and illnesses that develop over many years due to normal job functions are also covered.
If necessary, death benefits are also paid.
4. Who pays for workers’ compensation insurance?
Workers’ comp is paid by employers. It is handled by each state and employers pay into a state fund for coverage.
5. Can employers still be brought into a lawsuit?
If an injury is intentional on the part of the employer or caused by an activity outside of the normal duties of an employee, lawsuits are still possible.
Apart from a few cases, workers’ comp helps deter employees from bringing lawsuits against their employers.
6. Can employees be discriminated against for making a claim?
State and federal laws prohibit employers from firing or punishing employees in any way because of a workers’ comp claim.
7. Is there a risk of fraud?
Fraud in workers’ comp isn’t uncommon and both employers and employees are at risk for being found guilty.
Employers sometimes try decreasing their premiums by classifying employees as non-employees or owners. Sometimes employers also underrepresent the number of employees they have working for them to lower premiums.
Employees who make claims for non-existent injuries or illnesses are also guilty of committing fraud. Sometimes this is amplified by providers who don’t request to see proof of medical treatment.
Workers’ compensation insurance benefits both employers and employees. For benefits to be used to their full potential, employers need to make sure they know the basics of workers’ comp as well as their state’s requirements.
Keep track of workers’ compensation policies with SmartCompliance to assure that employees are protected in the case of a workplace injury or illness.