Workers’ Compensation Guide

One of the most significant expenses incurred by a business owner today is the cost of insurance, especially workers’ compensation insurance. Events that cause work–related accidents such as slips, trips or falls, as well as lifting and handling of materials cannot be prioritized. They could happen at any time. This guide will provide you with the information needed to more quickly analyze work–related risks.

What are workers’ compensation laws?

Prior to the enactment of workers' compensation laws, a worker had to sue an employer and prove negligence in order to be reimbursed for a work–related injury. What made it difficult for the employee to win these cases was the common law defenses used by the employers:

Assumption of Risk – allowed the employer to deny liability on the basis that the employee was aware of the risks when employment was accepted and therefore assumed the risk.
Contributory negligence – was used to deny liability on the basis that even if the employer was negligent the employee also had been negligent and should be responsible.
The Fellow Servant Rule – was used to deny libility on the basis that if the injury was caused by a fellow employee the employer could not be held liable.

Workers’ compensation laws were designed to provide a fair means of handling work–related injuries. They are based on the concept that most work–related injuries should be assumed by the employer, regardless of fault and without court proceedings. For the employee this means that workers compensation becomes the exclusive remedy available.

In most states, the law is compulsory. If the law is elective, an employer can choose not to be subject to the law and gives up all remedies under the law.

What types of benefits are provided?

State benefits may vary, but in general fall into the following:

Disability (loss of income): replace a portion of lost income resulting from the ability to work due to a work–related injuty.
Medicak Benefits: pay the cost of medical services incurred as a result of a work–related injury, illness, or disease.
Rehabilitation Benefits: include those expenses incurred as a result of physical therapy designed to improve physical functioning, rehabilitation, such as retraining for a new occupation.
Survivor/Death Benefits: may provide a wwekly benefit to a surviving spouse and children, as well as a designated amount for funeral and burial expenses.

What is compensable injury?

Under the law an injury must arise out of employment and in the course of employment. The injury must occur during the time work is actually being performed and for the purpose of employement, at the place of employment or while employment–related duties are being performed.

Employers Liability policy

All states, with the exception of North Dakota, Ohio, West Virginia, Washington and Wyoming, allow private insurance companies to offer coverage.

Workers’ compensation insurance agrees: to pay all compensation and other benefits as required by the workers’ compensation law in the state or states where the insured’s business operates. Benefits provided are dictated by state statute.
Employers liability insurance: provides coverage to the employer for sums the employer becomes legally obligated to pay, under comman law. Employer liability is nalso needed in order to cover those situations, such as exempt or illegal employments and injuries not covered by workers’ compensation laws.

Accidents cost money through direct costs such as medical and compensation expenses and indirect costs such as loss of production, time, employee morale and customer goodwill.

These unnecessary costs plus the cost of insurance can be controlled. Developing an effective cost control program is not an easy task and results may take some time to show up. Managing and controlling workers compensation costs should be viewed as a process, not a program, which starts with, and is driven by, you.

How do I get started?

The most effective cost control process invloves these basic elements:

Company safety program
Safety rules and regulations
Duties and responsibilties
Employee selection
Employee orientation and training
Facility inspections
Job safety analysis
Accident investigation
First aid activities
Recordkeeping

Keep in mind that when implementing a cost containment program it is not advisable, or even practical, to introduce all of these elements at once. Program elements can be introduced on an as needed basis with the primary goal being the health and well being of your employees. read balance of guide here