Workers’ compensation insurance financially protects a business owner and their employees in the event of a work-related illness or injury. To get the compensation benefits, the employer must make a claim with their insurance provider. How does such a claim impact you as a business owner?
Every business owner needs to know the procedure for making a compensation claim for a work-related injury. Your reaction to the incident will determine your future premiums and other indirect costs. You need to know what does and doesn’t qualify for a claim and what steps to take after making a claim.
Here’s a discussion of what every business owner should know about compensation claims.
The Process Of Making Workers Compensation Claims
Every business owner must know the procedure for making a compensation claim. Failing to follow proper procedure could inhibit your rights to compensation or lead to a share in financial responsibilities.
The specific procedure depends on the insurance provider, but this is the general procedure for making a claim:
- Seek immediate emergency medical attention for severe injuries. Employees with minor injuries should be allowed to leave work to seek medical attention.
- Employers must submit a report of the injury to their workers’ compensation insurance provider.
- Provide a compensation claims form to the injured employee and instruct them to fill it out within 24 hours of the time the injury occured.
- Inform the injured employee of their workers’ comp benefits and rights.
- Provide your insurance carrier with any follow-up documents and requisite interviews on the incident.
- Allow the injured employee to resume work after recovery.
- Inform the insurer is the suspect the employee filed a fraudulent claim.
How You Make Compensation Claims Will Affect Your Future Premiums
How a business owner reacts after a work-related injury will affect their future premiums. A single claim may not necessarily lead to higher premiums though this may depend on the nature of the claim. The more claims your business makes, the higher the chances of your provider raising your workers’ compensation premiums.
Future adjustments of your premiums are why your reaction after a claim should be to mitigate and address the factor that caused injury to prevent more similar cases. Consequent claims from an issue you leave unaddressed after claims lead to higher premiums.
Insurance providers use EMR, and experience modification rates, which is how your business claims rate compares to other companies in your industry—the more claims, the higher your EMR, resulting in higher premiums. Always address the cause of the injury after an incident to prevent higher EMR.
You Might Need To Make A Claim Even When Your Employees Have Health Insurance
Failure to report a claim because your employee has health insurance may affect your ability to receive compensation due to late reports. It’s common for employers to assume that the employee’s health insurance will cover the medical costs. However, their health insurance providers may advise that they file a workers’ compensation claim when the injury is work-related.
Suppose an employee, for instance, gets injured in a car accident while performing their work-related duties. In that case, you may need to make compensation claims from the auto insurer and your workers’ compensation provider.
What Injuries Qualify For A Work Insurance Claim
A business owner can save time and effort by understanding what will and won’t qualify for compensation claims. A work-related injury is a physical injury that an employee sustains in the course of safely and correctly performing their duties; this usually qualifies for compensation.
Environmental conditions like long-time chemical exposure may lead to medical issues and even lost wages due to illness. Illnesses resulting from such working conditions usually qualify for a claim.
Injuries to independent contractors, self-inflicted injuries due to negligence, substance abuse, and offsite injuries are typically not eligible for compensation claims.
Take Action, Stay Informed
Business owners pay for workers’ compensation insurance, and it’s vital that they understand precisely how it works to reap the benefits. The cover is meant to protect you and your business, but improper procedures, lack of knowledge on claims, and not taking action to mitigate future injuries can cost you dearly. Take time to understand your cover and how each share works.