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Listen in! Pick up some expert advice to a reader's question that we selected from CyberSchmooz.
7 Misconceptions About Workers' Comp Insurance
Every employer needs to have workers’ compensation insurance. As an employer or prospective employer, you likely already know that workers’ comp insurance is meant to protect employees who are hurt while they’re on the clock or in your workplace. But you might be surprised to learn about some of the features of workers’ comp insurance and how it works, because even among employers, it’s a topic ripe with misconceptions.
Top Misconceptions About Workers’ Comp
These are some of the biggest and most notable misconceptions about workers’ comp insurance:
- Workers’ comp insurance is automatically applied. You don’t get workers’ compensation coverage just for starting a business, nor is workers’ comp automatically included in any federal or state taxes you pay. How to get workers’ comp insurance may vary by state, but for the most part, you’ll need to find a specific provider, shopping around for quotes until you find a policy that works for you.
- Employees can’t sue you if they take a workers’ comp claim. In most cases, when an employee makes a workers’ comp claim, they forfeit any right to sue their employers—but this isn’t always the case. If an employee suffered a personal injury due to employer neglect, they may be entitled to seek further compensation in some situations. This is an extra incentive to maintain a healthy, safe, and accident-free workplace.
- Workers’ comp only applies in cases of negligence. Conversely, you may believe that workers’ comp only applies in cases where the employer was clearly negligent. In fact, it should cover any injury sustained on the job, no matter how it unfolded. It will apply in a total freak accident where no one was at fault, and apply even if an employee harms themselves through their own neglect or refusal to follow policy.
- Employer responsibilities are over when the claim is filed. Once an employee files a workers’ comp claim, you might believe your employer responsibilities are over. However, it’s your responsibility to work with your employee to get them back to work as quickly as possible. That means following up with them to judge their progress, helping them get more medical treatment if needed, and in most cases, gradually returning them to their full-time position.
- Injured employees don’t have an option for medical treatment. You might believe that the employer or insurance company gets to choose how an employee seeks treatment, or who they get to see for treatment. However, employees still have a choice. There may be some options that are off the table, depending on the state and your specific policy, but for the most part, employees will get to choose where they go for treatment.
- Workers’ comp claims can be processed at your leisure. Once an employee has reported an injury, you might be tempted to let the paperwork sit; after all, insurance companies tend to process things slowly. But as an employer, you’re responsible for completing the paperwork and processing the claim as quickly as possible. Remember, part of your job is to ensure the employee is treated and back at work as soon as possible.
- Independent contractors don’t have access to workers’ comp. You might think that only your full-time employees are eligible to file a workers’ comp claim; after all, they’re the primary audience you’re trying to insure. However, in some cases, your independent contractors—the ones who fill out a 1099—may also be eligible. If they are required to work onsite and suffer an injury while working, they may be just as eligible as any other full-time employee.
Building Your Understanding
The best thing you can do as an employer is improve your own understanding about how workers’ comp insurance works. Make sure to talk to your provider about exactly what’s covered and how to file a claim, and do research about workers’ comp laws in your state and region to see if there are any peculiarities you need to watch for. Most of all, when an employee does need to make a claim, make sure you follow the legal procedures to the letter, and do everything you can to make the process as smooth as possible.
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