Workers Compensation Insurance

Why do we have to purchase Workers Compensation Insurance? Well, before Workers Compensation Laws were established, the only way for an employee to collect compensation was to pursue their employer in a lawsuit. In which, they would have to prove negligence on the part of the employer which could be a difficult task. So, for employees who were truly injured in the workplace, they could go months or even years with no compensation and limited ability to work which can be a huge problem for society as a whole. Workers Compensation laws were enacted to limit the employees ability to pursue a lawsuit against their employer which also provides the employer a better way of managing and estimating their costs for employee injuries.

Worker’s Compensation Laws are enacted on a state by state basis so it is a good idea to look into what the laws are when considering expanding your work operations into other states. Some states require you to buy insurance from their state fund, others permit your to buy it in the open market, and there are others that don’t require you to purchase it at all. (Texas)

Workers Compensation is a very structured system giving certain values to different types of sustained injuries and disabilities. Each employee is grouped into a classification based on their type of work which assigns an insurance rate to their amount of payroll. Also, individual companies are given credits/debits based on their claims history as it compares to other companies in their same industry. But what can be done to contain my costs??

There are several things that can be done to ensure you are only paying for legitimate injuries from the time the injury occurs until they injured employee can return to a productive task. Consider the following:

• The best thing you can do is show the insurance company that you are committed to managing and preventing claims as best you can.
• Have a safety program in place and a return to work program
• Respond quickly to claims and work with the insurance company and clinics to reduce the costs.
• Maintain a clean and organized work environment
• Train Supervisors on employee safety and regularly check to make sure safety devices/restraints are used properly
• Implement a reward program for employees who follow safety rules and help others to be safe
• Do your own investigation and documentation of the claim as soon as it happens
• Implement a drug testing program to avoid unnecessary injury and Liability while employees are at work
• Attend safety meetings and ask for recommendations from your insurance company. They want to and are very willing to help you keep your costs down
• Identify the risks involved with your line of work and make sure the employees are aware of those risks and are trained properly