7 Myths Regarding Workers Compensation: Yes, Even the Low-Risk Industries Need It
By Rylie Holt
Business owners often face confusion when it comes to worker’s compensation and legal ramifications of failing to maintain the coverage. It is available to cover the cost of medical expenses and replace the injured worker’s wages if they are eligible. Reviewing 7 myths regarding worker’s compensation shows all business owners why they need coverage even if they are in a low-risk industry.
1. Small Businesses Don’t Need Workers Compensation
Small businesses do need to purchase worker’s compensation. The employer could face liabilities due to worker-related injuries that could create a financial hardship. Financial hardships can close small businesses completely. Worker’s compensation insurance provides coverage for worker-related injuries and lowers the risk of serious liabilities for a small business. Small business owners who want to protect their workers and their company more effectively can find help at paigeandcampbell.com right now.
2. Workers are Eligible for Only If They Were Injured While Performing Job Duties
Eligibility for worker’s compensation isn’t limited to injuries that occur while performing job duties. The worker’s compensation covers workers who are injured anywhere in the workplace. It doesn’t matter if the worker is performing their work duties at the precise moment they become injured. Any accidents or injuries that happen inside the workplace are covered under the worker’s compensation policy and require the employer to file a claim to seek coverage for their injured worker. The refusal to file a worker’s compensation claim could lead to a legal claim against the employer, and if the worker was eligible for coverage, the court could demand a larger judgment for the refusal.
3. Worker’s Compensation Provides Coverage for All Injury-Related Losses
Worker’s compensation doesn’t provide coverage for all injury-related losses. The insurance covers medical expenses for the injured worker and replaces wages for the worker until the worker is capable of returning to work. It doesn’t provide lifelong earnings if the worker develops a disability. If the worker develops a disability because of their injuries, the employer or the insurer might provide a settlement, but the settlement may not reflect lifelong earnings. With adequate coverage, the employer could avoid a more substantial financial award. Without it, the employer faces the full impact of the financial award.
4. The Business Doesn’t Need Workers Compensation If It is Completely Family-Operated
Federal laws require all businesses that hire more than one worker to purchase and maintain worker’s compensation coverage. It doesn’t matter if the workers are related to the owner. The employer must have coverage for all workers to provide coverage under worker’s compensation insurance. Any employers who don’t comply with federal laws and purchase and maintain coverage could face penalties. If a worker becomes injured, OSHA could shut down the business, and the federal government could issue fines due to non-compliance.
5. You Aren’t Eligible If You Weren’t On the Jobsite
Workers are eligible for compensation if they are performing job duties away from the job site. The job site is defined as any location in which workers are performing services for the business. This includes off-site workspace used to provide services to customers or sell products. This also includes accidents involving a company car where the worker sustains injuries. The only exceptions to this rule are if the worker was using the company car for non-business purposes or if the worker was intoxicated or under the influence of controlled substances and caused the accident. Deliveries made for the company define an off-site workspace, and the worker is covered while inside the vehicle and during each delivery regardless of where the customer is located.
6. Safety Programs Don’t Help With Insurance Costs
This is wrong, and some employers can reduce their insurance premiums by initiating safety programs. The safety programs provide step-by-step instructions for workers to lower their risks within the workplace. The programs address issues that often lead to worker-related accidents and injuries including faulty machinery and equipment. Providing instructions for a variety of risks helps the employees act quickly when the circumstances arise. Teaching the workers proper first aid based on risks within the workplace lowers the risk of more severe injuries. Explaining how to use personal protective equipment and where it is necessary lowers risks and ensures that all workers who need the PPE have it. Initiating new safety policies helps the company cover all potential risks and ensures that the workers are aware of these risks. Enforcing the safety programs and policies lowers risks and insurance premiums.
7. Worker’s Compensation is Provided Automatically When Paying Business Taxes
Worker’s compensation is available to companies that purchase it only. Employers do not receive worker’s compensation insurance simply by paying business taxes. It is necessary for the company to purchase the insurance through an insurer and review the policy to ensure that it covers all workers. The terms of the policy define how much coverage workers receive when they are injured on the job. They define what percentage of replacement wages are available to injured workers. The terms also define what conditions apply to filing a claim for coverage. Typically, the workers must undergo a drug test when they are sent to the emergency room or an urgent care facility for medical treatment. If the worker is intoxicated or under the influence of controlled substances, the worker is denied coverage.
Business owners must purchase worker’s compensation according to federal laws and regulations. The insurance coverage is necessary to provide coverage for medical expenses and wage replacement for injured workers. Myths associated with worker’s compensation lead business owners to lead they don’t need coverage if they have limited employees. However, federal laws require the business owner to purchase coverage if they have more than one worker. It doesn’t matter if the workers are related to the owner or not. The coverage applies to any accident that happens within the permanent workplace or any temporary off-site locations where services are provided or workers sell the company’s products. Safety programs initiated by the company can help the company save money if they enforce their safety policies to prevent accidents. Reviewing common myths about worker’s compensation educates business owners about why they need coverage even in low-risk industries.
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