[YWH S1E9] Workers’ Compensation Insurance
Insurance... what a racket! Americans pay trillions of dollars in annual premiums for various policies they hope to never use; homeowners insurance, renter’s insurance, auto insurance, disability insurance, life insurance, and so on. Insurance provides the policy holder, and their families, with a sense of security in the unlikely event that something does happen. No matter how diligent we may be by locking our doors, driving the speed limit, or passing on a once in a lifetime opportunity to base jump from the Eiffel Tower, sometimes… “It happens” (thanks Forrest!). In the world of business, insurance is no stranger, and in the case of workers’ compensation insurance, it is mandatory! Of course if you’re fortunate enough to be doing business in Texas, workers’ compensation is voluntary. Don’t Mess… well you know the rest. Each state establishes their specific parameters. For example, number of employees and whom may be excluded from a policy, but coverage is required.
I’ve always been fascinated with, “Who was the first person to…?” Such as, who was the first person to squeeze the anal gland of a beaver and taste it…DISGUSTING!! But someone did and now we have “natural” vanilla flavoring known as castoreum, YUM? The notion of workers’ compensation began in ancient times whereby a worker would receive monetary compensation for the loss of a body part based on a set schedule. For example, a thumb was worth X, an ear was worth Y, and so forth. In more modern times this was further refined sparking various forms of workers’ compensation coverage in the United States. At first, the insurance was voluntary because business owners were concerned that this “guaranteed” coverage affected their due process protection under the Fourteenth Amendment. However, states began making it mandatory after New York Central Railroad Co. v. White in 1917. According to Casebriefs, this case established that employers maintain their due process rights under the Fourteenth Amendment, and a product line was born.
Fret not my good business owner! In today’s episode of Your Workplace Horizon, we are joined by workers’ compensation Claims Manager, Lina Perez. Mrs. Perez has been working in the insurance claims industry for thirteen years, six of which have been specific to workers’ compensation for which she holds a California designation. Mrs. Perez, along with our team, dispense excellent advice that any business owner can put into action to get their arms around workers’ compensation costs. Much like an auto insurance premium, employers CAN manage their workers’ compensation costs. If one gets a speeding ticket or is involved in an accident, your auto insurance premiums will increase. The same is true for workers’ compensation when work related injuries occur. Conversely, if you maintain a good driving record, premiums will remain cost effective. Employers that embrace safety and prevention of work related injuries will positively impact their workers’ compensation premiums too. Just as in our personal lives, sometimes accidents do happen despite our best efforts to prevent them. If a work related injury does happen, get involved in the process! Communicate with your injured employee to obtain updates on their progress and show them you care. Partner with the claims adjuster to provide details they might not otherwise know, provide modified duty to get your injured employee working in any capacity as soon as possible and analyze the root cause of the injury to update your policies and procedures to prevent it from happening again. Statistics show that your involvement and care for a worker’s wellbeing after an injury will get them back to work faster and reduce your overall claims cost.
State of California - Dept. of Industrial Relations: https://www.dir.ca.gov/dwc/dwc_home_page.htm
U.S. Department of Labor - Workers’ Compensation: https://www.dol.gov/general/topic/disability/workerscompensation