Risk & Business Magazine Hardenbergh Magazine - Fall 2019 | Page 13

WORKERS' COMPENSATION
"MAKE SURE THE LEADERSHIP IN YOUR COMPANY
EXEMPLIFIES A CULTURE OF ACCOUNTABILITY."
WHAT IS COVERED BY WORKERS’
COMPENSATION INSURANCE?
The typical policy will cover employers/
employees for injuries employees sustain
on the work premises or anywhere the
employee is acting within the scope and
course of his or her employment. A common
claim is a death caused by traffic accidents
that took place while the employee was
in a vehicle for work purposes. It does not
matter whether the employee was driving
a company vehicle or the employee’s own
vehicle. However, no coverage is available
while an employee is driving to and from
work.
Loss of wages is covered for the duration
of the injury before the employee returns
to work. Some states have a limit on the
number of weeks the employer must cover
the employee.
In the event of an employee’s death, workers’
compensation will cover funeral expenses
and provide benefits to the deceased
worker’s family.
WHAT IS NOT COVERED BY WORKERS’
COMPENSATION POLICIES?
Injuries not covered by workers’ comp
insurance are those caused by negligence
or carelessness by either the employer
or employee. Injuries sustained while
the employee is found to be using illegal
substances or is intoxicated are excluded
from coverage in all policies. Injuries
suffered while the employee was not on
the job or was conducting activities that
violated company policy are also not
covered.
WORKERS’ COMPENSATION FRAUD
Unfortunately, workers’ comp fraud
is a reality of life. Both employers and
employees are known to commit such fraud.
Workers commit workers' compensation
fraud when they collect temporary
disability benefits and misrepresent their
job status. Fraudulent claims also include
filing a claim for an injury that is not
related to employment or did not occur
during the course of work. Employees can
also misrepresent pre-existing trauma
or previous treatment by claiming an old
injury that has not healed is a recent injury
in order to receive treatment. Materially
misrepresenting their condition to receive
benefits through workers’ comp is another
form of fraud. An example of this would be
workers staying home under the pretense
that their disability or condition is ongoing
when in fact it has healed.
Examples of employer fraud include when
an employer underreports payroll, that
is, claiming an employee gets paid less in
order to reduce workers' comp premium
costs. Employee experience is a factor
in premium costs. Employers have been
known to overstate the experience of their
employees to lower the cost of premiums.
And deceiving employees into thinking they
are covered by workers’ comp when they are
not is another form of employer WC fraud.
Premiums are at an all-time high, yet
business owners are unfortunately unaware
that they have a certain amount of control
in managing the cost of their workers'
compensation insurance. Here are some
measures you can take to reduce those
premiums:
• Make sure the leadership in your
company exemplifies a culture of
accountability. Their behavior on
the job must establish the type of
behavior that will lead to the highest
standards of safety. It starts at the
top.
• Incentivize your employees for safe
behaviors. Offer bonuses for no lost
time during a certain period. Awards
and recognition make employees
proud of their accomplishments
and strengthen company culture.
Implement effective hiring and
training procedures to reduce the
risk of accidents for new hires.
Clearly detailed job descriptions go
a long way towards reducing injuries
and may shield the employer from
claims of negligence.
• Understand and manage your
company’s Experience Modification
Factor. This is the number that
your insurance carrier will use
to determine your workers' comp
insurance premium. It is imperative
that you understand it and share it
with your employees and leadership
team so that everyone can take an
active part in making a positive
impact on it.
RETALIATION AGAINST EMPLOYEES FOR
FILING CLAIMS
Workers occasionally fear retaliation from
employers and opt to bear the cost of work-
related injuries themselves or pass it on to
their health insurance provider—a factor in
the increase in the cost of health insurance
nationwide.
Every state in the nation except two—
Mississippi and Georgia—makes it illegal
for employers to terminate or refuse
employment to those who have filed a
workers' comp claim or have reported a
workplace injury. Unfortunately, it is very
difficult to prove that an employee has been
discriminated against as a result of his or
her claim history.
MANAGING YOUR WORKERS’
COMPENSATION RISK TO REDUCE
PREMIUM COSTS
The cost of workers’ compensation
insurance is likely to be one of your highest
expenses for your business insurance.
Workers’ compensation insurance serves
both employers and employees. If you own
a business and have even one employee,
you would be well-served to consult with
an experienced insurance professional to
determine your best options for coverage.
Contact us today to find out how you and
your employees can benefit from the right
type of policy. Visit HIG.net to learn more. +
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