Workers’ compensation was created to help injured employees get medical treatment, unpaid wages, and all the help they need to return to work. In most cases, employers are covered by their insurance premiums, which can lower the financial burden that the workers’ compensation claims can have on the company.
However, there are outlying factors that may still make a workers’ compensation claim expensive to the employer. For example, injured workers need their medical costs covered which, depending on the coverage, can count as an additional expense to the company.
Additionally, if the employee was a valued team member, it is difficult to calculate what that costs a business. Not have a great employee on staff may require the work of more than one person to make up for lost performance by the injured employee.
And often times, business owners may have to spend money on preventative measures to make sure similar occurrences do not happen again. For example, a restaurant owner may want to update worn mats if an employee slips in the kitchen as well as create new cleaning schedule for potentially slippery areas. All these changes require thought, time, and effort from your team. And, none of that comes for free.
Can an Employer Fight a Workers’ Comp Claim?
The law states that every employer has the legal right to dispute a workers’ comp claim. Currently, there have been several cases of workers’ comp claim fraud, so states have allowed employers to be heard in such possible cases.
An employer can dispute a workers’ comp claim for other reasons, including the following:
- The employer believes that the work-related injuries weren’t severe or don’t require significant medical coverage.
- The injuries weren’t caused at the workplace. For an injury to be compensable, the injury must result from the employment and occur during the course of employment..
- The injured person doesn’t need time off from work.
- The injuries were pre-existing or unrelated to the workplace.
- The employee didn’t file the workers’ comp claim in time.
- The employee wasn’t clear on how or where the accident was caused.
- Lack of evidence for coverage.
The first step in fighting a workers’ compensation claim is to understand the state’s laws, including your rights and responsibilities as an employer. Remember that each state has different proceedings for workers’ compensation claims, so make sure that you have enough information on the topic and that you are represented by a reputable law firm.
Next, the employer needs to provide their reasons why they believe that the workers’ compensation claims are not valid. To do this properly, it’s important to have as much evidence about the incident as possible; the employer should have documented the incident from beginning to end in detail with witness accounts if possible.
If there is not enough factual or medical evidence to substantiate the claimed injury, then the claim should be denied and disputed.
Why is Workers’ Comp Insurance So Expensive?
Insurance carriers may charge different premiums for their workers’ comp insurance depending on the state since policies are based mostly on location and type of industry. On the other hand, some factors may or may not increase your workers’ comp insurance rates. To put it simply, the more injuries your employees are likely to sustain while working, the higher the cost of your insurance premiums can be. In that sense, a construction or agriculture business may have a higher coverage rate from the insurance company.
Getting employees back to work after getting injured can be complicated, especially if the medical expenses are high; if the business owner or manager doesn’t assess the situation properly, the company could eventually experience a significant loss. Overall, several factors may affect the cost of your workers’ compensation insurance premiums.
Payroll: The insurance company is always going to take into account the business’ annual payroll to provide a quote for the workers’ compensation insurance rate. Employers have to be ready to provide as much information as possible to the insurance company to get accurate coverage.
Employees’ Risk Factor: As stated before, not every business is equally risky for the employee. For example, an office job may not have as many safety hazards as a construction job. The National Council on Compensation Insurance (NCCI) has created a classification system that can help any business and insurance company calculate appropriate workers’ compensation insurance premiums according to the employees’ risk level.
Claim History: If the business frequently deals with workers’ comp claims, the insurance company may increase the premium costs. Much like car insurance premiums increase with the higher frequency of speeding tickets.
Typically, an insurance company is going to review the business’ claim history and provide accurate workers’ compensation insurance premiums depending on the number of past accidents and how severe they were. Keep in mind that past coverage claims can stay on the company’s record for three years after they’ve been settled.
How a Business Can Avoid Workers’ Comp Claims
A workers’ compensation lawsuit can severely affect the employer and the business, especially if they have to deal with an insurance company and workers’ compensation insurance costs. As stated, some direct and indirect costs may arise from an injured employee in the workplace.
The single best way to prevent those indirect costs and workers’ comp insurance premium increases is to promote a safe business environment for every employee to reduce the likeliness of an accident and the impact of a workers’ comp case on the employer.
Creating a new and safe business environment can take some time, but there are small steps that you can take to ensure the benefits of having a business that complies with most safety standards.
First, it’s essential to acknowledge that not all workers’ comp cases can be prevented by the company. Accidents happen all the time, and one of the best things to do in these cases is to take care of these safety hazards promptly and get the necessary help to prevent any significant loss to the company.
It is important to make your company work environment a safer one for everyone. A major part of the process includes employee training. If your new workers have the required knowledge to be safe, you can have a positive impact on employee productivity while mitigating the chances of accidents happening. And if something should go wrong, it would be wise to show support to your injured employee throughout the entire process.
As you onboard an employee, think about having clear SOPs, training, and safety requirements clearly stated and have your team sign documents stating that they understand and agree to the standards your company has in place. For example, uniform standards, such as non slip shoes in a restaurant, should be required and nonnegotiable.
Uniform Requirements (Gloves, Nonslip Shoes, Etc)
Depending on the type of business, it’s vital to have proper safety equipment for each employee at all times. For example, if you manage a construction business, consider safety equipment such as steel toe shoes, hearing protection, eye protection, and gloves.
Whatever your business, you should have these standards in place. They should be clearly stated and agreed upon with the understanding that if they do not comply, they will be asked to go home and come back properly dressed and ready for work.
EDG Law Is Here To Help
If you are currently dealing with a workers’ compensation claim, call EDG Law today. Employer Defense Group, LLP offers workers’ compensation defense throughout the entire state of California. We have a committed workers’ compensation group, comprised of some of the most knowledgeable and aggressive practitioners in the business – attorneys who are familiar with all phases of workers’ compensation and can help you manage claims promptly, economically and with a focus on business goals.