When companies are first getting off the ground, various state and federal regulations must be adhered to. This includes what type of business insurance a company must carry. While minimum requirements vary, new business owners should invest in additional coverage to ensure that all personal and business assets are protected. The US Small Business Administration breaks buying insurance into four easy steps: assess your risks, find a reputable licensed agent, shop around, and re-assess every year. The annual assessment is vital – as companies grow, their needs change. Owners should not be caught without proper insurance.
The type of business affects what insurance the owners should purchase. One policy all business owners with employees are required to include is workers compensation. This insurance helps protect both employers and employees in the event of an accident at work that leads to an injury. While some occupations are more hazardous than others, injury is always a risk. A work-related injury can be as simple as lifting something heavier than it appears to more dire injuries such as those resulting from a forklift or machinery accident.
Data from the US Bureau of Labor Statistics reveals that workplace-related injuries are on an unsteady decline. While the numbers have increased a few times in the past seven years of data, the overall trend is a reduction in injuries. A large part of this is due to increased safety regulations and businesses taking the initiative to protect their workers.
Unfortunately, no strategy is perfect. Despite everyone’s best efforts, accidents happen. If someone is hurt at the workplace, it’s the employer’s duty to file a workers comp claim and help guide their employee through the process.
When an injury or illness occurs, the first step is to report it to the proper person. This can be anyone in human resources, a manager, or a member of the health and safety committee; it depends on the business. The chosen authority should then see if first aid is needed and adequate or if emergency services should be contacted. The employer is responsible for contacting the employee’s emergency contact if needed and securing the site of the accident to ensure it is safe.
Once the employee is adequately cared for and the site of the accident is secured, the paperwork begins. First, the report. If possible, this should be done with the affected employee. The style of report can vary by the insurance company, but most include the following: when the incident occurred, where it happened, and the resulting injury or illness. Then, the employee will be asked when they noticed the issue when they received the claim form, and the date the form was turned in.
At this point, the employer’s representative should talk the employee through the process and discuss the details of the worker’s comp process. Generally, this includes physician selection, medical expense coverage, travel reimbursement, an overview of compensation benefits, and a reminder of the Family and Medical Leave Act (FMLA). Once the representative is sure the employee understands the process, they proceed to file the report with their worker’s compensation carrier. Many allow forms to be submitted electronically, while others may require a phone call from the claimant.
Brent Bland, senior vice president and head of workers’ compensation claims, AmTrust Financial Services, as quoted in Insurance Business America explains, “One of the most common pain points in workers’ compensation claims is communication. There’s a general lack of understanding among injured workers of how the workers’ compensation claims process works. I think one of the biggest challenges for our industry is in the area of communication and helping people understand from the very beginning what workers’ compensation is intended to cover and what help they should expect to receive if they suffer an on-the-job injury.”
The solution? Be open with your employees from the beginning. Employees, especially supervisors or other positions of authority, should be educated on coverage and reporting requirements. Businesses need to ensure they are following the law, their insurance policy, and their internal policy anytime there is a workers comp claim. It helps to include this information in any employee handbooks or procedure manuals, and the information should be included in any Illinois-issued worker’s rights posters. Supervisors need to know when, where, and how to report work-related injuries and illnesses, and business owners need to understand the entire process in order to guide their employees.
It is important to note that workers comp claims should not be approached as an employee versus employer situation. Instead, the employer and employee should work as a team.
The representative who helped the employee initially should keep in contact with both the worker’s compensation center and the employee to ensure the process runs as smoothly as possible. During this time, the employee and their physician should establish a plan for returning to work and whether or not the employee will need accommodation upon their return. Employers should follow physician instructions closely; inability to do so could prolong recovery, reinjure the employee, or lead to the employee having to quit. All of these could lead to a lawsuit and a plummet in company morale.
Some small businesses choose to keep a worker’s compensation lawyer on retainer to help navigate state and federal requirements, and they have a deeper understanding of insurance policies. They can also be the chosen representative to help guide employees through the claims process and ensure that they understand their benefits.
Generally, workers comp is handled between the insurer and the employee. When an employee accepts the offered benefits or a settlement package, they waive the right to sue. If the settlement is insufficient, they may need to sue. Most workers comp policies include liability insurance that covers the cost of a lawyer and any other fees.
Business owners should not be immediately alarmed if their employee hires a worker’s comp lawyer. If the company doesn’t offer sufficient assistance with the claims process, the employee may simply be ensuring they understand everything and file paperwork correctly. However, their lawyer can also help them in the event of an appeal or a potential lawsuit. If the company already has a lawyer, the two attorneys can often mediate a settlement that works for both parties.
Open communication with the employee can help mitigate the risk of misunderstanding benefits, misfiling claims, and involving lawyers. If a business owner has trouble understanding the local regulations or insurance policies, then a consultation with a lawyer can help prepare them should a work-related injury or illness arrive.
How a business handles workplace incidents plays a huge role in employee morale and trust. The business that shows it cares and wants to help the employee will often retain a career-long worker.