As a business owner, you work hard to make sure all facets of your company are operating safely. Regardless of how diligent you are, accidents happen.
In fact, in an average year, Australian workers file more than 100,000 workers compensation claims.
That points to a tremendous number of employers who believed all was well and found out otherwise.
What is Workers Compensation Insurance?
Workers compensation insurance is cover that protects your employees if they suffer injury, sickness, or death as a direct result of working for you.
It is important to note that workers compensation cover is compulsory in all Australian states and territories. Your company’s workers compensation policy benefits may vary from state to state.
What Are the Objectives of Workers Compensation Insurance?
Before workers compensation insurance was compulsory across Australia, an injured worker was at the mercy of employers and the court system. Employees taking their employers to court for compensation was common.
Compulsory workers compensation insurance has four purposes at its core.
- Proper cost allocation
- Accident prevention
- Replacement of income
- Rehabilitation of the injured employee
When Will Workers Compensation Approve or Deny Claims?
Generally speaking, workers compensation cover will only pay for incidents that occur in the workplace or are a direct result of the environment within the workplace.
If, while working at her job in a medical research facility, Rose accidentally comes in contact with toxins that make her ill and unable to work, workers compensation will pay.
Additionally, if exposed to a toxin that makes her ill, but the impact does not appear immediately, Rose is still entitled to workers compensation payments. This is because her health condition is a result of her job.
Remember that workers comp will not pay for illness or injury not related to work.
For Example, Nick is leaving for work falls down his steps and breaks his ankle. Although unfortunate, Nick’s accident did not occur on work property, nor was it a result of a workplace hazard. He would not receive a workers compensation payment.
However, if Nick broke his ankle because of a fall at his workplace, he would receive payment.
What Expenses Does Workers Compensation Usually Cover?
Because each state has its own insurance scheme, you should check with your insurance professional for the details of your workers compensation policy. Generally, a workers compensation policy will pay for:
- Medical expenses including emergency medical care, hospital bills, doctor fees, diagnostics, medications, and other interventions
- Rehabilitation necessary to allow the worker to return to their job
- Certain necessary personal items
- Payment for lost wages while the employee was unable to work
- A lump-sum payment if the workers injury is permanent
- A lump sum if the incident causes the employees’ death
For Example, scaffolding breaks, and Damon falls and injures his leg. The workers comp cover will pay for his trip to the hospital and fees incurred. Workers compensation will pay for Damon’s extensive rehabilitation including his physiotherapy and necessary medical equipment.
He will also receive payment for lost wages, and if Damon is not able to return to work, he will receive a payout based on the terms of the policy.
What Other Ways Can Workers Compensation Help?
It is the responsibility of all Australian employers to carry workers compensation insurance. However, the work, health, and safety (WHS) laws that govern Australian workplaces require employers to run a safe workplace. Often employers do not notice issues until an employee makes a claim, pointing out the potential hazard.
Another way workers comp cover can be useful is by identifying hazards in the workplace. Once identified, risks can be remedied by employers, making the workplace safer for everyone.
For example, Jimmy works in an auto shop and hears loud, high-pitched equipment during most of his hours on the job. Over a few years, Jimmy experiences hearing loss and ringing in his ears. Jimmy’s doctor determines the noise at Jimmy’s place of employment is the cause of his hearing problems.
As a result, the employer claims workers compensation. Jimmy receives payment according to the policy. Additionally, the company who employs Jimmy will reevaluate the workplace. Employees will get better protective equipment to make sure their hearing is safe.
The material presented in this blog post is for informational use only. It is not intended to replace a consultation with a trained insurance professional. For your insurance questions, always get the counsel of an expert in the field.
To contact one of our representatives about workers compensation, or any other type of business insurance, please contact us here.