To most small businesses, workers’ compensation is something you’ll rarely need to deal with in any level of detail. It’s a monthly payment — a form of insurance that protects your business and your employees against the immense cost of dealing with a workplace injury.
While it’s usually not necessary to master the details of workers’ compensation, understanding how work injury compensation works can help you make more informed decisions as an employer and ensure your business worker compensation insurance is covered in full.
Below, we’ve explained how workman’s comp benefits work, as well as the specific situations in which workers’ comp benefits are paid out. We’ve also covered the main requirements for work injury compensation claims, from the location of the accident to the exact circumstances.
How Do Workers’ Compensation Benefits Work?
Workers’ compensation is a type of financial benefit paid out in the event that an employee is injured while at work. Illnesses are also covered by workers’ comp, but in a smaller range of circumstances.
Also known as workman’s comp, most of its benefits are paid for common injuries such as back pain. Another common reason for claims is an injury caused by repetitive stress, such as operating equipment or constantly loading and deloading heavy items.
In order for an employee to receive a workman’s compensation benefit, they need to be injured while at work. Benefits can be paid for injuries that occur in the workplace, as well as injuries that occur outside the workplace but within the scope of an employee’s work responsibilities.
To receive benefits from workers’ comp, an employee needs to report their injury as soon as possible after it occurs. Fast reporting allows for easier documentation of the injury, making the claim process easier for the employee.
After this, the employee needs to file a claim form (in California, a DWC 1 form) to open the work injury claim.
As part of a claim, five different benefits can be paid. The first is a financial benefit for medical care. This is paid in order to allow an employee to receive medical treatment to recover from a workplace injury.
The second is a supplemental job displacement benefit. If the employee decides to reenter the workforce at a different employer and hasn’t achieved full recovery, this benefit helps to pay for skill enhancement and retraining.
The third and fourth are disability benefits. These include a temporary disability benefit, which is paid for injuries that temporarily restrict an employee from working, and a permanent disability benefit, which is paid for employees who do not fully recover from an injury.
Finally, workman’s comp also includes a death benefit, which is paid out to the spouse, children and other family members of an employee if they die as a result of a workplace injury or illness.
How Do Workers’ Compensation Requirements Work?
There are several requirements for employees to qualify for workers’ compensation. The first is that the employee needs to be hired by the employer in either a part-time, full-time or seasonal capacity — currently, independent contractors are not covered under workers’ comp.
Injuries also need to occur either in the workplace or within the scope of an employee’s job in order to qualify for the insurance. For example, an employee who injures themselves outside of work hours while not working usually cannot receive a workers’ comp benefit.
For employers, there are also strict requirements regarding workman’s comp. In most states, work injury insurance is legally required for businesses with employees. It’s also important for business to follow proper reporting and documentation procedures.
Get a Workers’ Comp Quote for Your Business
If you operate a business with employees, it’s essential for you to carry work injury insurance. Operating without insurance puts you at risk of being fined, as well as facing major costs in the event of a workplace accident that causes injuries.
We specialize in workers’ compensation insurance and can help you find a competitively-priced, comprehensive plan for your business. Learn more about our range of workers’ comp policies and talk to our team to receive a custom quote.