Saturday, October 11, 2008

Workers' Compensation FAQs

Frequently Asked Questions - Workers' Compensation

Question: How does workers' compensation protect the employer?

Answer: Your workers' compensation policy protects you as an employer from any lawsuits arising from your employees where you or your company are declared negligent.

Example: Your employee makes you as employer aware that there is a cracked ceiling tile that needs to be replaced. A week later the ceiling tile is not replaced and falls on the employee injuring the employee and causing damage to his/her eyes. You may be liable in a lawsuit as the potential risk was brought to your attention and necessary corrective/safety measures were not taken.

Question: How does workers' compensation protect my employees?

Answer: Your workers' compensation policy covers your employees two fold. First it covers your employees should they be harmed while on the job for medical damages. Secondly, it subsidizes your employee for lost wages if they are unable to work due to a work related injury.

Question: How can I lower my workers' compensation insurance premium?

Answer: There are many ways items that you can look at when assessing if you qualify for a lower workers' compensation premium. We recommend that you consult with your agent as some of these items may or may not apply to your state. I have listed a few below.

1. Create and maintain a safety program
2. Review and monitor your Experience Modification Rate
3. Mulit-Policy Discount - When you have your business policy and workers' compensation policy with the same company.
4. Review your coverage limits.
5. Review your employee and payroll amounts estimated at the inception of your policy.

Question: If an employee is injured, is there a limit on the amount of medical coverage?

Answer: In some states the medical coverage portion of your workers' compensation policy for injured employees is unlimited. Which means if your employee is injured and will need home health care for the rest of his/her life; the insurance company will pay for necessary medical damages.

Get a free workers compensation insurance quote today.

Question: Does my policy have a maximum limit for the employer?

Answer:Yes, Employer's limits are stated on your policies "Declarations Page". They are usually stated in a similar format as below"


Question: How do the employers limits of 100/100/100 work?


Definition of each Coverage Level:
- $100,000 in coverage for injury by accident – each accident max
- $100,000 in coverage for injury by disease – each employee
- $100,000 in coverage for injury by disease – policy limit

NOTE: It is important to note that you can increase these limits to different combination amounts. The maximum limits are usually $1 Million/$1 Million/$1 million. These limits may vary from state to state.

Question: How do I report a workers' compensation claim?

Answer:In most cases, all you would need to do is call your policy's claim department and they will assist you through the entire process. They will facilitate in completing all necessary forms required by you as the employer, the employee and medical facilities.

Question: Should I request a drug test if an employee is hurt on the job?

Answer: It is currently common practice for employers to require their employees to submit to a drug test as part of the process in a workers' compensation claim. This will help protect you in the event the employee submits a lawsuit against your company and may or may not make him/her eligible for benefits under your workers' compensation policy.

We recommend you consult with your agent and applicable state laws for a clear answer.

Question: How much will my policy pay an employee for lost wages?

Answer: It is important to state that this portion of your workers' compensation policy is determined by your domiciled state. The amount of compensation given to an injured employee for lost wages is usually about 50% of his/her current pay.

Question: How do I add a saftey plan for my business?

Answer:In some cases your insurance company can come out and perform a complete assessement of your business and crate a plan for you. Contacting your local OSHA office is a great resource.

Question: If my employee is driving to the bank to make a bank deposit for my business is he/she coverred under my workers' compensation policy?

Answer:Yes, Employees are coverred while performing duties on behalf of the company.

Question: Will my policy extend to new businesses I create?

Answer:No, if you create a new business you will need to purchase a seperate workers' compensation policy to cover that business.

Question: If my employees sue my business for an injury do I submit it under my business policy or workers' compensation?

Answer: Employee injured on the job that submit a lawsuit against your business do to work conditions that you were made aware of prior to their injury would be submitted on your workers' compensation policy.

Should a customer or third party sue your company for any other reason, you would want to refer this type of claim to your business policy coverage.

Get a free workers compensation insurance quote today.

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DISCLOSURE: All entries by are for informational purposes only and it is always recommended that you consult with your local insurance agent as coverage, definitions and claims procedures may differ from state to state.

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