What Every Business Owner Should Know About Workers Compensation

What Every Business Owner Should Know About Workers Compensation

Workers’ compensation is a type of insurance given to workers to cover them when they suffer from a work-related injury to compensate them for medical costs and lost wages. This type of compensation is, especially given to workers who have jobs in high-risk industries.

For instance, working in construction is a high-risk job that mandates insurance for workers. This is why we’re going to clarify what workers’ compensation is, and what you should know about it.

What is it Exactly?

As a business owner, you are required to take care of your workers and ensure that the area they are operating in is safe. However, accidents happen, especially in an industry that is known for being risky. Workers’ compensation ensures that your workers are given indemnity if they get injured while on the job. This insurance covers their medical expenses and pays the wage they lost during their recovery time. This compensation is covered regardless of who is at fault, whether it’s the employee or the employer’s fault. 

Why Do You Need it?

This type of insurance is sometimes mandatory by the labor laws in the country you are in. Not to mention that once you have this insurance in place, your employees can’t sue you for damages in the case of injury. Moreover, if you don’t have it, you will have to cover the damages from your pocket, which in turn could put you out of business because of the high expenses.

According to experts from Wyatts Compensation Lawyers, this insurance doesn’t only help protect the workers, but they protect the employer as well. For instance, if an employee gets injured or sick on the job, their medical bill and lost income are going to be covered. As for the employers, the small premium they pay for the insurance saves them the hefty fine they’d pay the state in the case of injury. Along with saving the employers from covering the bills from their own money, which when compared to the premium, might be a lot. Additionally, this insurance helps give your business a professional edge. For example, if you are in the construction business, it is a requirement that you have this insurance so you can bid on contracts. If you don’t provide workers’ compensation for contractors then you are more likely to never win a contract.

Who is Required to Have Workers’ Compensation Insurance?

workers compensation

Many factors determine the type of workers’ compensation you need, these factors include the number of employees, the risk potential, and whether or not your company has a history of job accidents. If your business is in a high-risk industry, then you are more likely to pay a higher premium for the coverage. For instance, truck drivers are one of the highest people to make workers’ compensation claims, because they are always in danger of having vehicular accidents, or back injuries from lifting heavy items. So if you are in a similar industry, then you have to have this particular insurance in place. However, some people get excluded and you are not required to provide this insurance for them, like domestic workers or seasonal and casual employees. Family members who work in the business are also excluded from this insurance.

What Constitutes a Valid Claim

We recommend that you report the claim to the insurer as fast as you can, even if your worker did not insist on it. The insurance company will then handle the matter, leaving you to focus on your business operations. Alternatively, the worker might make the claim themselves, if they were able to provide proof that the injury they got was at work, then they’d be eligible for that compensation. For instance, if the worker suffered from Carpal tunnel syndrome as a result of overexertion from doing a job, then in that case the claim is considered valid. Another example of a valid claim: a worker who becomes ill from inhaling chemicals used, and the worker can provide strong evidence that their illness was because of work. However, some claims are invalidated due to the circumstances surrounding the injury, such as the injury being self-inflicted by punching a wall, or when the employee was injured they were under the influence of drugs or alcohol.

As a business owner, you carry responsibility towards your employees, especially if your business is in a high-risk industry. Not to mention that insurance is vital for your business to thrive. However, keep in mind that some injuries might not be covered, for example, citing the cause of the injury as negligence might make them ineligible for workers’ compensation.