A Complete Guide to Set Up Workers’ Compensation Insurance

W orkers’ compensation insurance can be best understood as an extension of medical insurance that covers injuries and illnesses caused at, or due to, work. If an employee is out to deliver orders for their company and runs into an accident that causes them a physical injury, their workers’ compensation insurance will take care of the medical bill attached to the injury. 

Workers’ compensation insurance, AKA workers comp, is set up and paid by the employer, and no funds are deducted from the employee’s salary. It’s put in place to protect the company whilst also tending to employees’ medical needs whilst at the job. 

Workers’ comp covers one-time and ongoing medical care, lost wages, and benefits for family members of dead employees. 

In most states within the United States, it’s mandatory that the business purchase workers comp for the employees, even if it’s a small business. For those who are currently figuring out how to set it up, we’re hopeful that this guide on workers’ compensation insurance will answer your questions. 

Where to Start?

Workers’ compensation insurance is different from your business’s general insurance. Its policy is also different and is mandated in many states. Hence, the first step is to check the state policy on the matter. 

The state also identifies whether the workers’ compensation insurance is provided by the state, privately, or a combination of both. As a business owner, you can expand on the services made mandatory by the state. This way, you can offer more benefits to your employees as part of the employee’s well-being policy. 

Where to Find the Right Insurance Company?

If your state allows purchasing the insurance from private insurance companies, we recommend using Forbe’s Advisor’s list of best insurance companies for 2022 to locate the right fit for your company.  

WorkCompOne has also published knowledgeable literature on the matter. You can find state-specific resources here that can help you figure out the best insurance company for your business. 

Alternatively, you can also speak with an experienced agent who has adequate knowledge in the field. It is beneficial to employ the services of an experienced agent as they understand the ins and outs of the field.

How to Administer Workers’ Compensation Insurance?

Other than following the state protocol on the matter and selecting the right insurance plan, it’s important to also administer it effectively. 

In the administration process, it’s important to identify what constitutes a workers’ compensation claim, and how to report the claim. When administering it, our guide on workers’ compensation insurance recommends for the employer to:

Educate The Employees

To make the claim process easy, the first step is to educate the employees on workers’ comp coverage, benefits, and claim procedure. 

Arranging a training, followed by a protocol manual, is an effective way to facilitate the employees on when, where, and how they can report work-related illnesses and injuries. 

Assigning a Point of Contact

Assigning a point of contact (POC) whose designated duty is to tend to workers’ comp matters will make the process smooth, and quicker for all parties involved. 

The employees must inform the representative, so the person in the position can determine the nature of medical care, and begin the necessary paperwork to report the injury/illness. 

Filing the Report with Workers’ Comp Insurance Company

The next step is to prepare and report covering the incident, and to loop in the workers’ comp insurance company. The report must cover the who, when, what, how, and why aspects of the incident to be precise and helpful. It can have details including:

• Name of the employee
• Time, date, and place of the incident 
• Type of injury and how it happened
• Official medical report with diagnosis details 
• Proof to support the claim 

Some states also mandate the company to file a copy of the report with the state’s agency for the same. 

In filing the report, the company might ask for additional documents to determine the details of the report. At this point, it’s pertinent to stay in contact with the workers’ comp insurance company to expedite the process without any further losses. 

Return to Work for the Employee

In cases where the employee is permitted leave from work to recover, the insurance will cover their lost wages for the days. 

The POC is also responsible to arrange a timeline with the employee to return to work. Depending on the severity of the case, a doctor might place requirements for an employee’s safe return to work. 

Financial Assistance

Depending on the case and the company’s manual guide on workers’ compensation insurance, an employee may also receive additional financial support in the shape of:

• Salary continuation plans.
• Unemployment insurance in case the employee has been denied the workers’ comp insurance. 
• Paid sick leave for the recovery duration.
• Disability benefits if the injury has caused temporary/permanent physical disability