There are more than a few myths about workers’ compensation insurance. As an HR professional, understanding the truth about workers’ compensation can make your job easier and ensure your employees are better protected.
Depending on your state, the benefits of workers’ compensation include medical care, first aid treatment, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and the Return-to-Work Supplement Program.
Here are 10 common myths about workers’ compensation insurance debunked.
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Myth 1: Only workplace injuries are covered
Workers’ compensation covers more than just injuries sustained at a physical job site. These injuries are admittedly a major part of the coverage but not the whole picture. Workers’ compensation also covers illnesses and injuries caused by the nature of the work itself. This includes repetitive strain injuries and illnesses caused by exposure to harmful substances, for example. It’s not only about accidents on-site but anything arising from work.
Myth 2: Compensation is just another expense
This myth often comes from budget-focused decision-makers. It’s true workers’ compensation involves costs, but it’s an investment, protecting your organization from lawsuits and ensuring your employees receive necessary medical care.
Myth 3: Office workers don’t need workers’ compensation
High-risk jobs, such as in construction and manufacturing, are the types most often associated with workers’ compensation. In office environments, though, employees can suffer injuries from slips, falls, or carpal tunnel syndrome. HR teams in more low-risk industries may overlook this and miss out on the role of commercial online insurance, which can help tailor policies for specific business needs and industries.
Myth 4: Independent contractors are always exempt
Independent contractors are exempt sometimes – but not always. Also, remember that there can be legal complications when employees are misclassified as contractors, especially if they perform similar work to employees. Make sure to check your state’s laws and clarify contracts upfront to avoid any surprises.
Myth 5: Workers’ compensation fraud is rampant
The word “fraud” can understandably make HR professionals nervous, but fraudulent claims related to workers’ compensation are far less common than many people think. PBS has reported that studies show only 1-2% of claims are fraudulent. To minimize risk, organizations can focus on thorough documentation and training managers to spot red flags.
Myth 6: Small businesses don’t need workers’ compensation
Some small business owners believe workers’ compensation is unnecessary. In most states, businesses with even one employee are legally required to have coverage. Thankfully, small businesses can find insurance options and flexible plans that won’t break the bank.
Myth 7: Employees need to prove employee negligence to receive benefits
Employees don’t have to prove their employer was negligent. Workers’ compensation has a no-fault structure. This means quicker solutions and a better chance of trust maintained between employees and employers. As an HR professional, you can help make the process as smooth as possible. Employees can file a claim through the USAGov website and appeal a decision if it is initially denied.
Myth 8: Workers’ compensation claims ruin relationships
It’s easy to assume that filing a claim will sour the relationship between employer and employee, but when employees feel supported during a difficult time, they’re more likely to stay loyal and engaged. A well-handled claim demonstrates that the company values its workforce and prioritizes their well-being, fostering trust rather than resentment. Open communication, clear policies, and a compassionate approach help mitigate tension and reinforce a positive workplace culture. In fact, employers who actively support injured workers through recovery and return-to-work programs often see higher morale and retention rates. Addressing claims with transparency can strengthen, rather than damage, professional relationships.
Myth 9: Workers’ compensation policies are one-size-fits-all
Your company will be different from others – and so too will the risks. Insurance companies offer tailored policies to suit your profession (for example, food and beverage, retail, cleaning, Amazon sellers, or fitness). The cost of insurance will depend on the number of employees, the location of your business, and its operations, among other things.
Myth 10: There will always be a lawsuit
Litigation isn’t always the outcome after a claim. Workers’ compensation can prevent lawsuits by providing a no-fault system. Employees are covered for injuries, and employers are shielded from most liability. In many cases, employees simply want proper medical care and wage replacement while they recover, not a drawn-out legal battle. Companies that handle claims efficiently and communicate clearly can reduce misunderstandings that might lead to legal disputes. Additionally, many states have mediation and dispute resolution processes in place to settle issues without court involvement. A proactive, supportive approach to workers’ compensation claims minimizes the chances of litigation.
Takeaways
Workers’ compensation doesn’t have to be confusing or intimidating. Hopefully, with these myths debunked, those in HR can be more confident as protectors of both employees and their organization, whether they’re managing claims or shopping for coverage through online platforms.
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