Workers' Compensation Coverage: The Purpose for the Expense

What is the purpose of workers' compensation? This seems like an easy question to answer but is usually opens up a whole bag of worms. The arguments are the same everywhere; employees feel the company is responsible for everything and company leaders are tired of being taken advantage of.

The basic purpose of workers' compensation is to pay for costs associated with work related injuries. These costs include medical expenses and lost wages. But for more severe claims, employers may be responsible for nurse case managers, psychiatric care, weight loss, transportation, and much more. Because of the difficulty in managing a large claim, it is prudent to have experts on your side; the adjusters provided by workers' compensation coverage.

The first thing to consider in any claim to workers' compensation is whether or not the injury meets the definition of a work related injury. Questions that need to be asked include: What the person working within the course and scope of employment? Was horseplay involved? Was the person on break or clocked out? Were they following company policies and safety rules? The answers to all of these questions affect the outcome of the claim.

Employees today are more knowledgeable about the workers' compensation system. They understand that most employers must carry some form of this coverage. Additionally they believe that anytime they are injured on the job, their employer must pay for the expenses. Many are even aware of the state regulations regarding indemnity payments to cover lost wages.

The perception gap between employees and employers occurs most often when considering if medical treatment is needed. Many times, employees ask for treatment and the manager or company does not believe the injury requires it. Additionally, many companies experience fraudulent claims. Not just claims of people wanting to sue and be set for life, but claims brought on because the worker does not have the money to pay for treatment themselves. During times like these, it is nice to have help, in the form of the insurance company, on your side.

Having workers' compensation coverage also saves the employer money. When medical treatment is needed, the carrier will review all the bills for accuracy. Additionally, if the employee went to an in-network physician, discounts on treatment can be taken. In some cases the difference between what the employer would pay in cash for the treatment and what they pay through the carrier can be over 50% more.

The high premiums scare many away from carrying workers' compensation coverage. But going without it, even if you're not required to carry it, is like rolling the dice at craps. You are just one seven away from a large claim that could bankrupt any company.