Workers compensation insurance is an important tool for protecting both employees and employers in today’s workforce. It’s important to know your rights and to make sure your employees know their rights in case of injury on the job.
There are many myths that have circulated over the years regarding workers comp. Here are five of them.
1. Small Businesses with Few Employees Don’t Need Workers Compensation Insurance
Actually, the reverse is probably true. If you are operating a small business, and one of your employees gets injured on the job and decides to sue, that lawsuit could cost you everything. You could literally lose your entire business overnight. Perhaps a larger business could survive the cost of a lawsuit, but a small business will not likely be able to do so.
Running a successful small business is very difficult. You feel every sale and every expense. Every dollar that passes through your bank account makes a difference. So yes, your insurance premiums will have to factor into your budget and add to your operating costs, but when you think of the alternative, is there really any other option? Insurance is a necessary cost of doing business. Don’t gamble with your future. Protect your business and ensure its future success. Workers compensation insurance companies have specialists who can guide you in choosing the specific policies and levels of protection that will be best for your business, so be sure to consult an agent to help you choose the best plan.
2. It’s Cheaper For Small Businesses To Pay Out-Of-Pocket
This ties in with the point above. Many small business owners, managers and sole proprietors underestimate the costs of on-the-job injuries. There are medical costs, which often turn out to be greater than first anticipated. There are legal costs. And there are also opportunity costs and loss of revenue due to being understaffed and having to fill the position with a new hire. Then there are training costs for the new hire, as well as lower productivity as that new hire learns to do the job properly.
All of these costs – and sometimes more – can turn out to be far more expensive than many business owners would expect, especially the legal costs. As mentioned above, the legal costs alone could put a small company out of business for good.
The reality is that any business that has employees carries the risk of those employees becoming injured on the job, whether the workplace is a factory, a warehouse, a construction yard or an office. The risk is always there, and pretending otherwise could be a huge mistake.
Again, take advantage of the protection that insurance coverage provides. All it takes is one accident to shipwreck your business.
3. Most Employees Who File Workers Comp Claims Are Faking It
You hear about the stories of employees faking injuries and lying to insurance companies all the time. You might have even seen stories on television where undercover investigators catch people faking injuries to keep collecting workers comp. Because of people like this, it’s not unreasonable to think of fraudulent practices whenever workers comp claims are filed.
But the truth is that most claims are legitimate. People really do get injured on the job sometimes, and they really do need costly medical treatment and ongoing physical therapy sessions to bring about a full recovery and get back to work.
The frauds and liars are out there, but they are greatly outnumbered by honest employees who just want to get the medical care they are entitled to so that they can get on with their lives and get back to earning their paychecks.
4. Return-To-Work Programs Are Too Costly For Small Companies
Many small businesses owners and managers mistakenly believe that paying off their workers comp claims is all they need to do when a worker is injured on the job. Following through with payment is certainly the responsibility of the company, but there is so much more that can and should be done to help the injured employee transition back into the workforce.
Return-to-work programs can make that transition smoother and faster, and that helps not only the employee, but the employer as well. Even the smallest gestures can show your employees that you care about their well-being and want to welcome them back into the organization.
If the employee is unable to fulfill their original job duties, then see what you can do to accommodate them. There may be adjustments that could be made to allow them to carry out some of their old duties, but in some cases it might be necessary to move them into another position entirely.
5. Independent Contractors Cannot Collect Workers Comp From Clients Because They Are Self-Employed
There may be some truth to this particular “myth”, but employers often make assumptions about independent contractors’ rights that turn out to be incorrect. In some states, independent contractors may be able to successfully file workers comp claims if they are injured on their client’s worksite. If you employ independent contractors to work for your company, be sure to consult your attorney or workers compensation insurance providers in your state for detailed information about your rights and responsibilities regarding these workers.
If you have any questions about your rights and responsibilities to your employees regarding job site injuries, don’t hesitate to contact an insurance specialist today. At Allied Insurance Brokers, our worker’s compensation insurance providers are happy to provide you with any information you require.
*Allied does not deem this blog entry as a complete and thorough listing or overview of the above topic, and does not recommend it be primarily relied on. It only highlights some common issues and resolutions. For a thorough overview, please contact Allied’s Risk Engineering Division.