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Protect Your Business with Workers Compensation Insurance
Every startup company needs to prepare for the worst. Even if you are an experienced entrepreneur, a lot of things can go wrong the first year of a company. One of the most important considerations is of course the safety of your employees, so it is important that your company has workers compensation insurance. This will help put you and your employees’ minds at ease in case there is ever a workplace emergency.
For those who are unfamiliar, workers compensation insurance is put in place to make sure that an employee will be covered should they get injured on the job. Many startup companies assume that workers compensation insurance is only really necessary for dangerous industries such as construction. However, this is not the case.
According to The Bureau of Labor Statistics, nearly 3.1 million people in the US suffered a non-fatal workplace injury or illness last year. This equates to about 3.5 cases per 100 full-time workers. Common workers compensation claims include trips and slips, vehicle accidents, and electrical hazards—things that can happen in just about any workplace.
Workers Compensation Coverage Basics
This insurance typically covers a variety of areas:
- Medical Treatment This includes hospital stays, travel expenses, physical therapy, etc. for all injuries including loss of limbs, breaks, and diseases.
- Rehabilitation This is often needed so workers can come back to work. If a worker cannot return to their original profession because of the injury, then they will be placed in a different field and will not have to find another job.
- Lost Wages Up to two-thirds of the employee’s salary will be paid with this insurance.
- Liability Insurance If an injured employee files a lawsuit against your company, this insurance will help protect it.
Failure To Obtain Workers’ Compensation Coverage
If an employer fails to obtain required coverage and an accident occurs, the injured employee either file a lawsuit against the employer in civil court or file a claim against the state workers’ compensation system. Monetary exposure to a suit in civil court can be extremely significant to the employer. Stop-work orders and fines can be levied in addition to injunction and assessments against the employer. Employers who try and circumvent the law by going “naked” may also expose their personal assets and other business assets as well.
Colorado Workers’ Compensation: What you Need to Know
Virtually all employees must be covered by workers’ compensation insurance. The only exceptions are the following types of workers:
• Casual employees who earn less than $2,000 per year
• Domestic or maintenance workers in a homeowner’s private employ
• Inmates of correctional facilities
• Volunteer ski lift operators
• Railroad workers
• Independent real estate sales personnel paid solely by commission
• Independent contractors
• Employers and employees covered by federal law
• Employees of religious and charitable organizations who earn less than $750 per year
Workers’ compensation is governed by state, not federal, law, and each state’s system differs slightly in the details. However, the structure and operation of the overall workers’ compensation system is very similar from state to state. The main differences are the rates paid to injured employees and the procedural rules employers, employees, and insurance companies must abide by.
What Does Workers’ Compensation Cover?
Workers’ compensation laws cover only work-related injury or illness. But, the injury or illness does not necessarily have to occur in the workplace. As long as it’s job-related, it’s covered. For example, employees are covered if they are injured while traveling on business, doing a work-related errand, or attending a business-related social function.
Covered injuries and illnesses can range from sudden accidents — such as falling off a scaffolding — to injuries that happen over time, such as computer-related repetitive stress injuries (RSIs), or illnesses that result from exposure to workplace chemicals, air pollution, or radiation. For example, many workers receive compensation for repetitive stress injuries such as carpal tunnel syndrome and back problems. Workers also receive compensation for illnesses and diseases that are the gradual result of working conditions — for example, heart conditions, lung disease, and stress-related digestive problems.
What Doesn’t Workers’ Compensation Cover
Not all problems that occur in the workplace are covered. Coverage may be denied in situations involving:
- injuries caused by intoxication or drugs
- self-inflicted injuries
- injuries from a fight started by the employee
- injuries resulting from horseplay or violation of company policy
- felony-related injuries
- injuries an employee suffers off the job
- injuries claimed after an employee is terminated or laid off, or
- injuries to an independent contractor.
When Can an Employee Sue an Employer in Court?
Employers aren’t protected from all employee lawsuits related to injuries. If the employee is injured because of the employer’s intentional or reckless actions or the employer did not have workers’ compensation insurance, the employee can bypass the workers’ compensation system to sue the employer in court for a full range of money damages, including punitive damages, pain and suffering, and mental anguish. Employees may also be able to sue outside third parties, such as when the employee is involved in a car accident that is someone else’s fault or the employee was injured by a defective piece of equipment. The employee who is misclassified may be able to sue for the inability to collect unemployment when they are terminated because they were not an “employee”.
What Benefits Are Available Under Workers’ Compensation?
The workers’ compensation system provides:
- replacement income when employees are off work
- payments for medical expenses, including doctors’ visits, surgeries, and prescription drugs, and
- vocational rehabilitation benefits — including on-the-job training, education, or job placement assistance (depending on the state where the employee is injured).
An employee who is temporarily unable to work will usually receive temporary disability payments of two-thirds of the employee’s average wage, up to a fixed ceiling. An employee who becomes permanently unable to do the work he or she was doing prior to the injury, or unable to work at all, may be eligible for long-term or lump-sum benefits for permanent disability. The workers’ compensation system also pays death benefits to surviving dependents of workers who are fatally injured in a work-related incident.
What Are an Employer’s Responsibilities for Workers’ Compensation?
Employers have a number of obligations under the workers’ compensation system. If these requirements are not met, employers can be fined and injured employees may be able to sue an employer in court for punitive money damages.
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Carry Workers’ Compensation Insurance If your business lacks the workers’ compensation coverage required by law, employees may file a lawsuit against the business in civil court
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Post Notices and Advise Employees of Their Legal Rights Employers must post required notices in a convenient location frequented by employees during working hours. The notices or posters contain important information about employees’ rights and:
- provide the name of the company’s workers’ compensation carrier, or the fact that the employer is self-insured, as well as who is responsible for claims adjustment
- state that injured workers have the right to receive medical treatment and to select or change treating doctors, and
- give details about available workers’ compensation benefits.
Employers must also notify new hires of the above information.
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Provide Claim Forms to Injured Employers Employers must provide injured employees with a workers’ compensation claim form within 24 hours of receiving notice of the injury. Employers must also supply the employee with written information (usually a pamphlet) about the employee’s rights under the workers’ compensation system. The written material should provide details about available benefits and how to file a claim.
OPT OUT?????Sole proprietors, corporate officers and members of limited liability corporations who own at least 10 percent of membership interest may decide whether they wish to be covered. They may elect to opt-out of Workers’ Compensation coverage by submitting a corporate officer rejection form to their insurance carrier.
Bright Idea! An optional way to cover corporate officers who wish to opt out is to purchase both a Short term and Long term Disability Insurance policy. The long term policy would be portable coverage for the officer to take with them to the next business opportunity
Workers’ compensation is a “no-fault” system. Since it makes no difference who is to blame for the injury, employees do not have to prove that the employer’s negligence caused it. To be compensable under workers’ compensation, the injury need only be sustained in the course of employment. Injured workers don’t have to show that the employer was negligent, but only that they were at work when injured. It doesn’t matter that they (or a co-worker) were partly at fault nor that they knew the job was risky. “Contributory negligence,” “assumption of risk,” and other defenses normally used by defendants in an accident case do not apply to on-the-job injuries.
What is an “injury”? The term “injury” has a specialized meaning in the workers’ compensation statute. While most people think of an injury as the result of a specific event or incident (such as an accident), workers’ compensation …
Discounts over and above bidding the coverage: We work with a leading self funded Workers Compensation program that can provide general contractors and subcontractors substantial savings of 30-60% over Pinnacol. and other plans. We also have a health insurance company that works with a Workers Compensation carrier that will provide a discount if you have both their coverages.