Workmans Comp Insurance
From LoveToKnow Business
Workman’s compensation (workman's comp) insurance programs exist to protect employees who have been injured on the job or who have incurred work-related injuries. Before these laws were enacted, costly litigation was waged by both employers and employees, with employers intent on disproving cases, and employees working hard to prove that they had been injured and were due compensation depending upon the nature of their injuries. That being said, Workman‘s comp can become a nightmare for small business owners because it’s a complicated state mandated program. Workman‘s comp is generally an expensive no-fault insurance that carries heavy penalties issued against businesses who do not carry the insurance.
Workman’s Comp Programs
Employer’s workman’s comp insurance policies are available from commercial insurance companies, at regular or predetermined excessive risk policies obtained through assigned-risk programs. Rates are based on an experience modification factor, a formula that compares a company’s accident and injury record with average data for all employers in a particular industry. It is a number which means that the higher the experience modification factor, the higher the costs will be for that employer.
Costs are also affected by employee job classifications, a rating assigned by each state, based on estimated risk levels for the performance of a particular job. The higher the classification, the higher your costs will be. Classifications can get fuzzy really quick, because there are some overlaps. It’s important to get your employee classification exactly right, or you’ll end up spending more money than you need to for wrongly classified jobs.
This employee job classification system is maintained by National Council on Compensation Insurance an independent organization, also known as a "Rating Bureau" in the insurance industry. Most states use this classification system with the exceptions of California, New York, Delaware and Pennsylvania which have their owns systems in place.
Other states have their own classification systems. Check with Insurance Regulation Authority Listings by State Directory for information about your state.
What Workman’s Comp Prevents
In most states employers are prevented from terminating an employee for simply reporting a workplace injury, or for filing a workman’s comp claim. Other employer actions prohibited include refusing to hire a person for previously filing claim. Learning about a previously filed claim makes most employers think that they may be next and are understandably reluctant to hire nonetheless.
The law prevents workers to falsely filing workman’s comp benefit claims. Illegal claims cost small business owners millions of dollars per year. This aspect of the law has created a thriving industry niche for private investigators hired by employers to videotape claimants engaging in work, sports or strenuous physical activity despite their claims of being disabled. Television news programs revel in broadcasting video of theses cases where claimants are caught jumping around or carry heavy objects just before they visit their local claims office.
For More Information
Workman’s comp insurance terms can be viewed at Glossary of Workers' Compensation Insurance Terms
The International Association of Industrial Accident Boards and Commissions maintains a detailed list of workers' compensation agencies.
U.S. Department Of Labor contains information on State Workers' Compensation Laws.
This page has been accessed 749 times. This page was last modified 19:58, 24 October 2006.
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