Injuries to employees can be devastating for businesses, especially small businesses with fewer employees available to take on new roles when an injured worker is on leave. While workers compensation insurance will help pay medical costs and replace an injured employee’s lost income, your business will have to absorb costs associated with reduced productivity, overtime, training replacements, and so on.
The best way to minimize the hidden costs of workplace injuries and related insurance costs is to prevent accidents from happening in the first place. Follow the steps below and consider developing a formal, comprehensive workplace safety program to help reduce the risk of injury:
Workplace safety programs provide additional benefits beyond preventing accidents. These programs have been found to increase employee morale, retention and productivity.
Unfortunately, accidents and injuries do happen. Following the steps above can help reduce workplace injuries, but the risk cannot be absolutely eliminated. To help employees—and your business—recover from a workplace injury, your company will need workers compensation insurance. Workers compensation insurance requirements for employers vary from state to state—and knowing the requirements for your state is essential to protecting your business.
A workers compensation insurance claim can be filed if an employee is injured at your workplace or while on the job at another location. A claim can also be filed if a worker is injured in a vehicle accident while on business. Costs are also covered for employees that develop work-related illnesses. Your workers compensation insurance will cover:
Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.
While workers compensation covers costs directly tied to an injured employee, it does not cover the hidden costs associated with the loss of an employee, including:
Workers compensation must be purchased as a stand-alone policy, approved by the state in which you do business. This type of coverage is not included in Commercial Package Policies (CPPs) or Business Owners Policies (BOPs).