Several states include workers compensation insurance as part of their employer’s liability coverage. Workers compensation is a type of insurance that covers the injured worker’s wages and medical expenses related to an injury on the job. Workers’ compensation is often required by law in situations where employees may be more likely to injure themselves, such as: steel mill jobs, construction work, recycling plants.
Reduces the Incidence of Employee Theft
Workers compensation has a cost-benefit ratio many times better than other types of insurance. This means that the worker who pays for his own workers compensation insurance payment is less likely to commit theft because he is not in financial need.
Workers compensation insurance reduces the risk of fraud by reducing the need for expensive medical care and loss of wages. By replacing stolen benefits, one would still be paying for medical expenses (as under a health insurance plan) and wage loss (as under Workers Compensation).
Removes Employer Liability for Employee Injury-Related Costs
Workers compensation insurance takes the “liability” out of employer liability for work-related injuries. It shifts the risk to insurance companies whose only agenda is profit. Thus, an injured worker receives immediate and continued medical care, regardless of his or her financial situation.
Reduces Insurance Premiums for Employers
Workers compensation insurance reduces the risk of liability for workplace accidents. This results in lower insurance premiums, a better benefit package, and can even reduce the number of “no-fault” claims filed. No-fault means that all employees are eligible to receive medical benefits regardless of fault in causing the injury.
Reduces Risk of Employment Discrimination Claims
Traditional health insurance plans do not provide benefits to workers while they are on leave from work.
Prevents Liable Parties from Firing Accident Victims
In contrast to health care and other types of insurance, an employer cannot refuse a claim under workers compensation because he or she either caused the accident or can afford to pay for it.
Provides a Clear Return on Investment
A study performed in 1989, looked at the potential fiscal implications of offering workers compensation to employers and employees. The study found that:
By providing workers compensation benefits to employees who suffer on the job injuries, employers obtain a clear return on investment. By taking on more risk, employers reduced their exposure to the risk of workplace injuries. In addition, by reducing their liability and paying for medical care, employers gained increased productivity through less absenteeism and less absenteeism-related costs.
Helps Eliminate “Samaritan” Cases
Workers compensation gives injured employees the assurance that they will obtain the medical care and wage replacement benefits they need, even if the employer who caused the accident cannot pay for them.
Factoring in legal costs, an employer who has been sued for an injury-related incident could be responsible for paying $120,000 in employee costs and wages. By offering workers compensation insurance to employers, injured employees can immediately access medical care and wage replacement at no cost to them or their employers.
People are often opposed to paying for insurance, but workers compensation can be a great investment for employers. Workers compensation provides a clear return on investment, helps eliminate “Samaritan” cases and prevents liable parties from firing accident victims.
