We define workers’ compensation, how it works, what it covers, & how to file a claim.
Workers’ compensation is a type of business insurance that protects your employees if they get injured or sick while on the job. If you run a business, you’re probably going to need worker’s compensation insurance––it’s a requirement in every U.S. state and in most countries around the world.
Workers’ compensation is a win-win: You’re covered for expensive benefits that your employees might need if they get sick or injured, and your employees can be comfortable knowing that they’re not paying out of pocket if something happens.
When you purchase workers’ compensation insurance, you’re protecting your business and your employees from any injuries or ailments that might be caused from work.
And what about mental health? Well, it depends on the specific insurance you’ve purchased. Some plans include coverage for mental health issues, while others do not. Make sure you know this from the start: You should be able to clearly communicate with employees about what they’re covered for.
So what happens if you need to file a claim? Here’s the standard process:
1. Your employee lets you know about a work-related injury or illness.
2. You guide your employee through the paperwork process––ask your insurance provider what they’ll need to fill out.
3. You submit paperwork and file a claim with the insurance provider.
4. The insurance provider decides whether to approve or deny the claim.
If you’ve done everything right, the claims should get accepted. But claims do get denied, and these are the main reasons why:
But, as long as everything is above board and you’ve followed your state and insurer’s procedures, you should be set. Now let’s look at what workers’ compensation will actually cover.
The specific benefits of workers’ compensation change with each case. But, there are a few main categories that your claims will likely fit into. These are the big ones:
When an employee or employer lies to get payments from workers’ compensation insurance, they’re committing workers’ compensation fraud. It’s a huge deal, and it’s one of the reasons that valid claims can sometimes get denied. Insurance companies are picky.
There are two types of workers’ compensation fraud:
Businesses can avoid fraud by properly classifying their employees, reading up on state and territory laws, and purchasing the proper insurance. With employees, it’s trickier––telling people not to lie isn’t always a great deterrent. Instead, be as rigorous as possible when verified accident reports and medical claims.
If someone says they got injured on the job, make sure they really did.
Reading up on the workers’ compensation laws in each U.S. state is straightforward. And, most states have similar rules. But if you’re hiring internationally, it can be more difficult to learn what you’ll really need to do for compliance.
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