Workers comp was established many years ago as a benefit-type system that safeguards any worker hurt or injured while on the job. The Department of Labor and Industrial Relations and the Division of Workers Compensation administers the day-to-day operation of the system.

Prior to the establishment of workers compensation insurance, employees who got hurt of injured on the job could only pursue their employer for compensation through civil or tort law. Workman compensation insurance allows businesses to provide benefits to sick or injured or employees while protecting themselves from high dollar lawsuits. There are some specific federal laws that allow certain types of protection to specific types and classes of workers.

1. The Jones Act provides military personnel the chance to seek benefits called "cure and maintenance" when a worker is injured as a direct result of negligence by the employer while working on any type of U.S. vessels;

2. The Federal Employment Liability Act (FELA) holds railroad employers liable for employees' injuries resulting from the railroad's negligent actions.

3. The Longshore and Harbor Worker's Compensation Act (LHWCA) gives workers comp benefits to particular types of private naval employers.

4. The Black Lung Benefits Act provides compensation for miners who may be suffering from "black lung" disease (pneumoconiosis).

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Obtain workers comp training for yourself and your employees

If you are an employer, make sure you are knowledgeable about workers compensation by attending workers compensation seminars to better administer any benefits arising from a workplace injury.

I recommend: There are many different types of workers compensation training available to employers and HR staff to administer the benefits related to on-the-job injuries. One of the foremost providers of workers comp seminars is TrainUp.com, which provides both on-site training and e-learning opportunities. Another resource for training is HRTrainingCenter.com, which also has specific types of compensation related training programs.

Learn and assess the appropriate workman's comp rates for specific injuries

Knowledge obtained through training can help you understand the workman's compensation rates of each type of compensation under workman's comp. Since the laws that regulate workman's compensation benefits may vary from state to state, you should find state specific information that focuses on the appropriate rates and standards where you live.

I recommend: To find out if you have the best deal on your workers' compensation insurance, you can obtain the lowest of these rates for your class code, as filed by insurance companies. You can find these basic rates through the Department of Insurance, Financial Institutions & Professional Registration in Missouri. Another valuable resource for this information is the New York State Insurance Department. If you live in a different state, your own state's website should contain similar information specific to your location.

Consider hiring a workers comp attorney

Workman compensation laws are very complicated and vary from state to state. A workers comp lawyer can help assure that all the necessary items and procedures are followed correctly.

I recommend: LawInfo can help you find information about workers comp lawyer and can even connect you with a lawyer in your area. Online Lawyer Source also has a listing of attorneys that specialize in workers compensation.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Workers compensation is a complex process that must be done in the proper steps and within specified timeframes in order to be eligible. Knowing the procedures will enable everyone involved to complete the claims process accurately and expeditiously.

Workers' compensation insurance covers employees who are injured or become sick during work activities. Most states require businesses to have coverage. Because each state has different policies and procedures, it's important to investigate requirements in every state in which your employees live, work, or travel.

Some states require you to buy coverage through state-operated funds, while others allow you to buy either from state funds or from independent operators. Workers' comp rates are rising faster than those for any other insurance coverage, but there are ways to keep your costs down:

1. Shop around to find the best coverage for your company
2. Focus on prevention to keep premiums down
3. Consider bringing in an outside firm to audit your coverage for savings

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Find your state(s) requirements

Requirements vary by state, so make sure you investigate each state where you have employees.

I recommend: Use this list of the workers' comp authorities in all 50 states and DC. For information on workers' comp rules in general and how your state might differ, check out the site for National Council on Compensation Insurance.

Contact providers

Some states require you to obtain coverage through their state-operated funds, but others allow you to choose your coverage. If your state allows you to choose, ask your other insurance carriers if they offer workers' comp and whether they provide any package deals.

I recommend: To receive quotes from multiple carriers, use this quote-request form at BuyerZone. If well-known brand names make you comfortable, you might consider contacting some of the big names in insurance – Travelers, Fireman's Fund, Liberty Mutual, The Hartford, CNA – all of which provide workers' comp coverage. Or try Insurance Noodle a specialist in small business insurance lines, including workers' comp.

Consider a workers' comp audit

Auditors will check your insurance bills against your internal information to find areas in which you may have been overcharged.

I recommend: Check out workers' comp auditors like those of Revenue Recovery and Business Planning Group or WCA Cost Recovery Consultants. Or ask your accountant, lawyer, or banker for referrals.

Implement workplace-safety policies and procedures

When it comes to workers' comp, prevention is the best medicine. Establish safety programs and drug-free workplace policies..

I recommend: Use the extensive workplace safety checklist from Nonprofit Risk Management Center. For information on setting up a workplace-safety policy, see BizFilings.com. Contact the Occupational Safety & Health Administration (OSHA) and the National Institute for Occupational Safety and Health (NIOSH) to find information about particular workplace issues, whether it's hazardous substances that your employees regularly come in contact with or health issues that commonly affect your industry, such as carpal-tunnel syndrome.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Check with your trade or business association to see if you can get a better rate through them.
• •  You might have 'employees' that you're not aware of. Investigate any uninsured contractors or subcontractors that you might be responsible for.
• •  Ask your insurance company if you can pay as you go, rather than pay in one lump sum. More and more insurance companies are offering this service.
• •  Check out discounts for 'good behavior.' Some carriers offer discounts of 5% to 15% if you have few, small, or no claims in a given year, or if you've implemented workplace safety or drug-free workplace programs and policies.

Workers compensation is a type of insurance that pays a portion of the worker's salary and medical care when an injury occurs while working. This compensation is given in exchange for relinquishing the worker's right to sue their employer for negligence. This trade off is known as "the compensation bargain."

Employers are prohibited from doing any type of retaliating actions such as disciplining or firing employees as a result of filing for a workers compensation claim, or taking action against another employee who may assist someone else in their claim for worker's compensation. The process for filing a claim is:

1. Provide notification to the employer about the employee's injury, which is potentially compensable, by giving notice to the manager of the employee within 30 days of the date of the injury. If the employee is unable to give such notification such as in the case of a hospitalization, this requirement may be excused provided that the employer is aware of the injury.

2. The employer submits a report to the workman compensation insurance board and the insurance carrier who sets the workman's comp rates.

3. The insurance carrier then begins paying the employee the appropriate rate of compensation and medical bills.

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Know what types of injuries workers comp covers

For workman's comp to cover an injury, the injury must have happened at work, and must also have been directly related to the job or work. In order to become more knowledgeable about workers compensation basics and the various types of injuries covered by it, businesses have invested in providing workers compensation seminars for their management staff. Through workers compensation training, employers are better able to identify potential risk areas associated with workers comp insurance claims and eliminate the risks.

I recommend: DisabilitySecrets.com addresses workers’ compensation basics, such as the types of injuries covered, compensation settlements, claims and attorney information. The New York State Workers Compensation Board also provides valuable information about workers comp.

Learn about the rate of compensation through workers comp

Compensable workman's comp monetary claims usually receive around 66%, or around two-thirds, of the employees regular salary or wages. However, they consider other issues that involve whether or not an employee's accident or injury-related damages are temporary or permanent, and partial or total.

I recommend: Each state has its own rules and regulations when it comes to the actual reimbursement rate for the injury. There are also special federal statutes and exclusions of coverage, which you can find at ExpertLaw. You can find State Specific Workers Compensation Forms at FindLaw.

Submit claims for possible compensation through workers comp within the statute of limitations

Most workers compensation laws indicate and require that an employee (or family member) file a claim for the benefits provided by workman's comp within one year of the date of the injured worker's accident. It is important to know the right periods for the state involved regarding workers compensation insurance claims and laws. For example, California has a one-year statute of limitation while Florida has a two-year period in which to file. It is important to be aware of each state's laws concerning workman comp eligibility and the workman's comp rates in order to assure a timely process within the appropriate period as directed by the state in which the filing is taking place.

I recommend: States differ in regards to the time frame for filing claims. An article on the International Risk Management Institute website addresses the importance of adhering to these timelines. For complete state-by-state information, WorkersCompensation.com gives complete and concise information.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Every employee should get a copy of the workman's comp claim filed by the employer. If the workers comp insurance company denies the administration of benefits, the employee can move rapidly and file an application for an administrative hearing, which the state workers comp board will conduct.

If you own a business, particularly in manufacturing or shipping, you may one day have to deal with workers' compensation. You might find it a good idea to familiarize yourself with key terms used in many workers' compensation cases. While laws and regulations regarding workers' compensation differ from state to state, many workers' compensation key terms are used across the country. You'll benefit by knowing what an impairment rating is and how it is determined, or what a cumulative injury is and how such cases are treated.

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Cumulative injury

Most cases of workers' compensation involve a single incident resulting in a specific trauma or injury. However, some cases seek damages for a cumulative injury. A cumulative injury is a work-related injury in which symptoms arise over a period of months or years.

I recommend: InjuryBoard.com provides a detailed explanation of cumulative injury and how it relates to workers' compensation.

Impairment rating

In some cases, an injury in a workers' compensation case needs to be evaluated by a physician. Using guidelines established by the American Medical Association (AMA), a physician will assign an impairment rating to an injury.

I recommend: Nachman Brautbar M.D. fully explains what impairment ratings are and how they are used in workers' compensation.

Maximal medical improvement

Maximal medical improvement (MMI) refers to an injury which is not expected to get better or worse, regardless of medical treatment. MMI is used to determine one's ability to return to work and the possibility of permanent disability.

I recommend: Find a definition of maximal medical improvement (MMI) and how it is important to workers' compensation at the Minnesota Department of Labor & Industry website.

Permanent and stationary

Permanent and stationary is the term used by doctors to describe a patient after MMI has been determined. In regards to workers' compensation, this term is important in that it may signal the end of workers' compensation benefits.

I recommend: WorkersCompensation.com provides a full explanation of permanent and stationary.

Apportionment

Apportionment is a term that may be used after a permanent and stationary condition has been determined. In some cases, an injury in addition to the one resulting from work may be a cause of permanent disability. Apportionment refers to the determination of how much a permanent disability is caused by the work-related injury.

I recommend: The Law Offices of Robert S. Havens describes apportionment and how it may be used in relation to a permanent and stationary status.

Vocational rehabilitation

Some injuries may result in an individual being able to return to work, but not in the same type of job as before being injured. Workers' compensation provides vocational rehabilitation, which may include retraining and job placement assistance.

I recommend: The Kansas Department of Labor explains vocational rehabilitation and how it is used in workers' compensation cases.