According to the Social Security Administration, workers’ comp payouts exceeded $61 billion in just one year. As a business owner, there are a few types of incidents that you try to avoid at all costs — and an employee injury followed by a workers’ compensation claim is probably at the top of that list. Indeed, a workers’ comp claim can strike fear into the heart of any business owner, but if you understand what to expect, you’ll learn that handling a claim doesn’t have to be stressful. In fact, worker’s comp offers protections to your company that may massively reduce your liability for employee injuries — and that’s a good thing! Read to learn how a workers’ comp claim may affect your business.

Your Insurance Premiums May Rise

One of the first concerns of any business owner facing a workers’ comp claim is the overall cost that such a claim will incur. It’s unfortunately true that a workers’ comp claim will cost your business — unless it is proven to be illegitimate — and one of those costs may be a rise in your insurance premiums. It’s important to note that a single claim may not automatically trigger higher premiums, but it isn’t uncommon to see an increase after more than one claim.

Administration Expenses of Processing

It should be noted, too, that processing a workers’ comp claim puts a significant administrative burden on your business. There is a good amount of paperwork that must be completed, including documentation of the incident and filing the employee’s medical records. Somebody will have to be paid to complete this work, and the expenses of this labor can quickly add up.

Potential Impact of Litigation

Employers must also be prepared for the potential consequences and expenses associated with litigation. If you chose to go to court and fight against the employee’s claim, you will have to obtain legal representation, and you will also face the possibility of a bigger payout if you happen to lose the case. These expenses commonly motivate businesses to simply settle a workers’ comp claim out of court in order to avoid the potential expenses of a lost lawsuit.

Impact on Productivity and Payroll

Yet another common cost associated with a workers’ comp claim is the negative impact on productivity and payroll. While an injured associate is out of work, you will have to hire and train a temporary replacement or pay your existing employees overtime in order to cover the loss of labor. During this time, you’ll still often be forced to pay wages for an employee that is injured, making the expenses multiply. Each state has different standards dictating the sum of wages that an employer must pay to an injured employee.

About InsureMyWorkComp

InsureMyWorkComp is a digital brokerage that helps clients find the right workers’ compensation solution for their business needs. Unlike other online platforms, we will help you to work with an agent who can provide you the right solution for your risk profile. Our staff has over 50 years of workers’ compensation underwriting and sales experience, and we are confident that we will provide you the support that you need. For more information or to get a quote, contact us today at (855) 340-9138.