Businesses are built from a mutually-beneficial and codependent relationship between employers and employees. The former must not only demand results but help their employees reach their potential.
Valuing employees and showing dedication to providing a safe work environment helps create a better relationship between these parties. One workplace safety responsibility that falls solely on the employer is maintaining workers’ compensation insurance coverage. Workers’ compensation insurance is a contract that protects both the employer and the employee in cases of work-related injuries and occupational illnesses.
With the exception of Texas, every U.S. state requires businesses (except those that meet specific criteria) to have workers’ compensation coverage. However, even if a company doesn’t legally have to carry workers’ comp, many employers opt for it anyway to protect their interests and those of their employees.
The Employee Perspective
Workers’ comp covers work-related injuries or illnesses—anything that occurred or developed while the employee performed their work responsibilities. A few common workers’ comp claims include: an employee sustaining an injury from heavy lifting, developing a repetitive strain injury (RSI) from typing, or becoming ill from exposure to hazardous chemicals in the workplace.
In these situations, workers’ comp guarantees the following benefits to the injured or ill employee:
- Coverage for their medical expenses
- Replacement of lost wages during the recovery period
- Provision for ongoing care costs in the case of disabilities
- Coverage of funeral expenses in the event of a fatality
In addition to providing financial compensation when a claim is made, an objective of workers’ compensation is to give employees a sense of safety. Employees can have peace of mind knowing that with proper workers’ comp coverage, they will not have to pay on their own or through their health insurance for any work-related incidents.
The Employer Perspective
Without workers’ comp, the employer would have to pay injury and illness expenses out of pocket. In this case, a single injury could devastate the company financially.
Furthermore, many workers’ compensation policies include some form of legal protection for employers. When employees accept a position covered by an employer’s workers’ comp policy, they lose the ability to sue the employer for a workplace injury or occupational illness. However, there are exceptions to this agreement. For example, an employer may still be held liable if:
- An employee can prove that the employer intentionally caused the injury or illness
- The employer exhibited gross negligence
- The employer, acting in bad faith, denies a claim for compensation from a worker
Furthermore, an injured worker does not have to accept the compensation package offered by the insurer. Instead, they can seek a monetary settlement through their legal representative. States have different processes for these settlements, which can cover the following expenses:
- Lawyer fees
- Disability payments
- All medical expenses
- Surgery and future medical treatment
- Current and future lost wages
When the employee’s legal representative and the insurance provider agree on a workers’ comp settlement amount, the insurer pays the claim. If they can’t reach an agreement, the case may go before a judge who examines the case and establishes an agreement that’s fair for both parties.
Having a workers’ compensation policy in place establishes this framework for negotiation, which generally doesn’t involve the employers. Without this form of insurance, an employer would not have a structured way to deal with settlements.
Working Together Toward Workplace Safety
Workers’ compensation insurance is beneficial for employers and employees, ensuring a safer work environment for both. And the best way for an employer to earn their workers’ loyalty is to show that they’re providing them the best care possible.
But having coverage doesn’t mean that injuries or illnesses in the workplace should be expected. On the contrary, employers must train and engage with their employees to create an optimal work environment.
One way to do this is to implement health and safety programs. Employers can follow the Occupational Safety and Health Administration (OSHA) website recommendations as a resource to learn more about workplace safety, their responsibilities, and how to train employees properly.
An Investment Through Which Everyone Wins
Workers’ compensation exists to protect both employers and employees in a win-win investment. If the workers feel their interests are respected, their work is valued, and that all safety measures are being taken t
o ensure their health, they’ll be more likely to show loyalty to their employer. On the other hand, the employer will have happy and productive professionals while avoiding the costly processes that an unexpected injury or illness can bring.
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