Workers’ Compensation Considerations

May 15, 2023

In today’s dynamic business landscape, the welfare of employees remains a paramount concern for organizations. Workers’ compensation plays a critical role in safeguarding the physical, emotional, and financial well-being of employees who suffer from work-related injuries or illnesses.

As a pillar of the modern risk management strategy, workers’ compensation insurance provides an essential safety net, ensuring that injured workers receive appropriate medical care and financial support while simultaneously protecting employers from potentially crippling litigation.

To learn more about workers’ compensation programs, visit the U.S. Risk Workers’ Compensation page.

Basic Coverages and Purpose of Workers’ Compensation Insurance

A typical workers’ compensation package includes basic coverages such as:

1. Medical Expenses: Covers necessary medical treatments and ongoing care for work-related injuries or illnesses.
2. Lost Wages: Provides a portion of an employee's lost wages during their recovery period.
3. Disability Benefits: Offers compensation for temporary or permanent disability resulting from a work-related injury or illness.
4. Vocational Rehabilitation: Supports employees with job training, education, and job placement assistance when unable to return to their previous job.
5. Death Benefits: Provides financial support to the dependents of an employee who dies due to a work-related injury or illness.
6. Funeral Expenses: Covers reasonable funeral and burial costs in the event of a work-related death.

Specific coverages and benefit amounts may vary depending on the jurisdiction and policy.

The purpose of risk-focused insurance packages, particularly workers’ compensation, is to provide some level of security against financial losses for employees injured in the workplace.

How Does Workers’ Compensation Benefit Employers?

Employees are not the only beneficiaries of comprehensive workers’ compensation plans. Workers’ comp also benefits companies by providing or fostering:

• Legal Protections: Fulfilling legal obligations, avoiding penalties, fines, and lawsuits.
• Financial Stability: Covering costs of work-related injuries or illnesses, preventing unexpected expenses.
• Employee Retention: Demonstrating care for employee well-being, fostering loyalty and satisfaction.
• Improved Workplace Safety: Encouraging safety measures and hazard controls, reducing accidents.
• Enhanced Productivity: Providing security, promoting employee engagement and productivity.
• Reduced Absenteeism: Expediting recovery and return to work, minimizing disruptions.
• Reputation Management: Showcasing responsibility and ethical practices, improving company reputation.

By prioritizing employee safety and offering a sense of security, workers’ compensation contributes to increased productivity, reduced absenteeism, and enhanced company reputation. This risk insurance also protects companies from liabilities, including regulatory and legal issues.

Evaluating Workers’ Compensation Plans: Questions for Insurance Brokers

When discussing workers’ compensation insurance with a broker, consider asking the following questions to help determine the right plan for your company:

1. What is the broker’s experience in providing workers' compensation insurance for businesses in your industry?
2. How are the premium rates determined, and what factors can influence these rates for your specific business?
3. What specific coverages are included in the policy, and are there any optional coverages that may be relevant to your business?
4. What is the claims process like, and how can the broker assist with claims management?
5. Are there any available discounts or cost-saving strategies for your business, such as bundling with other insurance policies or implementing safety programs?
6. How does the insurer handle workplace safety assessments and recommendations for reducing the risk of work-related injuries or illnesses?
7. What resources and support does the insurer offer for managing and navigating workers’ compensation, such as legal advice or return-to-work programs?
8. Are there any policy exclusions or limitations that you should be aware of, and how might they impact your business?
9. How does the policy address independent contractors or temporary workers, if applicable to your business operations?
10. What is the broker’s track record for customer service and responsiveness, and how can they help your company navigate potential issues with your workers' compensation coverage?

By asking these questions and discussing your specific needs with the broker, you can better understand your options and choose the workers’ compensation plan that best aligns with your company’s requirements and objectives. ◼