What are The Risks Associated with Workers Compensation?

Last Updat­ed on May 19, 2023 

Work­ers com­pen­sa­tion is a type of insur­ance that pro­vides ben­e­fits to employ­ees who are injured or become ill as a result of their job. How­ev­er, there are some risks asso­ci­at­ed with work­ers com­pen­sa­tion, such as dis­putes over lia­bil­i­ty, insur­ance fraud, adverse med­ical out­comes, finan­cial hard­ship, and psy­cho­log­i­cal stress.

There are several risks associated with workers compensation. 

• Dis­putes can arise over whether the employ­er is actu­al­ly liable for an injury or illness. 
• Work­ers’ com­pen­sa­tion pay­ments are also sus­cep­ti­ble to insur­ance fraud. An employ­ee may false­ly report that an injury was sus­tained on the job, exag­ger­ate the sever­i­ty of an injury, or invent an injury. 
• Injuries involv­ing a week or more off work lead to aver­age lost earn­ings of around 20% over at least 10 years fol­low­ing injury. 
• Only between one-half and three-fourths of injured work­ers eli­gi­ble for work­ers’ com­pen­sa­tion cash ben­e­fits actu­al­ly receive them. 
• Com­pa­nies with robust ben­e­fits plans that include such perks as employ­ee assis­tance and leave pro­grams have a bet­ter han­dle on the risk of com­pli­cat­ed work­ers’ com­pen­sa­tion claims that include stress and anxiety. 

For exam­ple, a con­struc­tion work­er or elec­tri­cian would be con­sid­ered high­er risk than an office worker.

Risks Involving Workers Compensation

• Dis­putes over lia­bil­i­ty: One of the biggest risks asso­ci­at­ed with work­ers’ com­pen­sa­tion is the pos­si­bil­i­ty of a dis­pute over lia­bil­i­ty. This can hap­pen when there is uncer­tain­ty about whether the injury or ill­ness was caused by the job or by some oth­er fac­tor. In these cas­es, it may be nec­es­sary to go to court to deter­mine who is liable.
• Insur­ance fraud: Anoth­er risk asso­ci­at­ed with work­ers’ com­pen­sa­tion is insur­ance fraud. This can hap­pen when an employ­ee exag­ger­ates or fab­ri­cates an injury in order to receive ben­e­fits. It can also hap­pen when an employ­er fails to report an injury or ill­ness, or when an employ­er tries to deny ben­e­fits that are right­ful­ly owed to an employee.
• Adverse med­ical out­comes: Work­ers com­pen­sa­tion can also be risky for employ­ees who are injured or become ill on the job. This is because they may be forced to see doc­tors and receive treat­ment that is cho­sen by their employ­er’s insur­ance com­pa­ny. This can lead to adverse med­ical out­comes, such as delayed or inad­e­quate treat­ment, or treat­ment that is not in the best inter­ests of the employee.
• Finan­cial hard­ship: Work­ers com­pen­sa­tion can also lead to finan­cial hard­ship for employ­ees who are injured or become ill on the job. This is because they may be unable to work for a peri­od of time, and they may not be able to col­lect full wages while they are recov­er­ing. This can lead to finan­cial prob­lems, such as mount­ing med­ical bills, lost income, and debt.
• Psy­cho­log­i­cal stress: Work­ers com­pen­sa­tion can also lead to psy­cho­log­i­cal stress for employ­ees who are injured or become ill on the job. This is because they may expe­ri­ence anx­i­ety, depres­sion, and oth­er men­tal health prob­lems as a result of their injury or ill­ness. They may also expe­ri­ence stress due to the uncer­tain­ty of their finan­cial future, the chal­lenges of return­ing to work, and the ongo­ing legal process.

If you have been injured or become ill on the job, it is impor­tant to be aware of these risks. You should also be aware of your rights under work­ers’ com­pen­sa­tion law. If you have any ques­tions, you should con­tact an attor­ney who spe­cial­izes in work­ers’ com­pen­sa­tion law.

Here are some tips for pro­tect­ing your­self from the risks asso­ci­at­ed with work­ers compensation:

• Keep good records: If you are injured or become ill on the job, it is impor­tant to keep good records of your injury or ill­ness. This includes keep­ing track of all med­ical bills, lost wages, and oth­er expens­es. It is also impor­tant to keep track of all com­mu­ni­ca­tion with your employ­er and the work­ers’ com­pen­sa­tion insur­ance company.
• Get legal advice: If you have any ques­tions about your rights under work­ers’ com­pen­sa­tion law, you should get legal advice from an attor­ney who spe­cial­izes in work­ers’ com­pen­sa­tion law. An attor­ney can help you under­stand your rights and can help you pro­tect your­self from the risks asso­ci­at­ed with work­ers compensation.
• Be aware of your rights: It is impor­tant to be aware of your rights under work­ers’ com­pen­sa­tion law. Your rights may vary depend­ing on the state in which you live. How­ev­er, some of your gen­er­al rights may include the right to: 
  • Receive med­ical care
  • Receive lost wages
  • Receive per­ma­nent dis­abil­i­ty benefits
  • Receive death benefits

Learn more:

1. investopedia.com
2. epi.org
3. businessinsurance.com
4. forbes.com
5. business.libertymutual.com

If you have been injured or become ill on the job, it is impor­tant to know your rights and to pro­tect your­self from the risks asso­ci­at­ed with work­ers compensation.