Workers Comp Awards – How Benefits Are Determined
Any workplace injury can throw your entire daily routine into turmoil. Compensation, dependent on proper understanding of workers compensation award, can assist you to get back on track.
TL;DR
- Workers comp award is a settlement given to an employee who got injured at work.
- It’s crucial for day-to-day agency work as it involves compensation calculation and payout decisions.
- It’s often misunderstood as employees think they will get the full salary, which is not always true.
- We always advise checking the specific policy form as the award structure often varies by state and carrier.
What Is Workers Comp Award in Insurance?
In simple words, workers comp award is the amount a worker receives as a lump sum or in regular payments after getting injured at work.
Technically, it is a term used in the insurance industry referring to the compensation awarded to workers for specific losses incurred due to job-related injuries. The compensation amount appears on the declarations page alongside the coverage and policy details. Depending upon the employee’s injury severity and long-term impact, the insurance company decides the compensation amount to be awarded.
Key Related Terms to Know
- Declared amount – An amount stated by the insured as the value of the insured property.
- Lump sum settlement – A one-time payment for the total or part of a claim.
- Permanent partial disability – A type of workers’ compensation benefit that a worker may be entitled to if they are injured but can still perform some work.
- Temporary total disability – A type of Workers’ Compensation award where the employee is expected to recover, but is temporarily unable to work.
Common Questions About Workers Comp Award
How is workers comp award calculated?
Insurance carriers use a formula to calculate workers comp award. This would take into account the worker’s weekly wage, permanent or temporary disability, and type of disability. For example, if an employee earns about $900 per week and got awarded a permanent partial disability of 30%, the weekly compensation would be about $270 (30% of $900). Remember, awards for permanent total disability are higher compared to those for temporary or partial disability.
Can workers comp award be negotiated?
Yes, workers comp awards can be negotiated. An employee can work with a lawyer to negotiate a fair settlement with the insurance company. Once an agreement is reached, a judge must approve it. Before starting the negotiation, the employee should have a clear understanding of what’s their claim worth, including medical bills and future care costs.
What happens when a workers comp claim is denied?
If a workers comp claim gets denied, the worker can request a hearing before the workers’ compensation board. During this hearing, they present evidence and argue why they should be awarded. Then, the judge makes a decision, which can be appealed within a certain time-frame if dissatisfaction arises.
How long does it take to receive workers comp award?
After the judge approves the workers comp award, the insurance company should pay it within a certain time-frame – usually within 14-28 days. Delays in payouts should generally be reported to the workers’ compensation board.
Workers Comp Award vs. Personal Injury Settlement
Personal injury settlements and workers comp awards both provide financial compensation to people injured in an accident. However, they differ in various aspects.
Comparison Area | Workers Comp Award | Personal Injury Settlement
|
Primary use case | Injured at the workplace | Injured outside the workplace |
Coverage/concept type | Worker’s compensation insurance | Personal injury insurance |
Typical exclusions | Injuries resulting from the employee’s intoxication or intention to harm themselves/others | Injuries arising from employee’s work-related tasks |
Who is most affected by errors? | Employees and employers | General public |
Common mistakes | Not submitting claim on time, not following doctor’s advice | Not gathering evidence, not hiring a lawyer |
Real Claim Examples Involving Workers Comp Award
Scenario 1: An office worker suffered a severe back injury while carrying heavy boxes during an office move. The injury rendered her unable to return to work for a prolonged period. The workers’ compensation insurance company calculated and awarded her a substantial compensation for medical care and lost income.
Scenario 2: In a factory, an experienced worker lost his thumb in an unfortunate machinery accident. Post-accident, he could no longer perform his duties efficiently. After assessing the situation, the insurance company provided him with a workers comp award accounting for his permanent partial disability.
Scenario 3: A janitor slipped and fell on a wet floor at work, resulting in a broken leg. Initially, the insurance company denied his claim stating absence of proper evidence. However, after presenting CCTV footage and eyewitness testimonies during a hearing, the judge approved a considerable workers comp award.
Limitations and Common Mistakes
- Workers comp award doesn’t cover injuries outside work-related activities.
- Misunderstanding that the award corresponds to full salary.
- Not reporting the injury immediately, causing unnecessary delays or denial.
- Not following the doctor’s advice strictly can affect the compensation payout.
How to Explain Workers Comp Award to Clients
Personal Lines client: “Think of it as a financial safety net if you get injured while doing your job. It’s not your full salary, but a portion of it to help you get by until you can work again.”
Small Business owner: “Workers comp award is protective gear for your business and your employees. If someone gets injured while working, this is the compensation they’ll receive. It shields you from potential lawsuits and saves your employees from financial hardship.”
CFO or Risk Manager: “It’s a calculated financial provision for employees injured at work. The key factors for calculation include the worker’s salary and the severity and type of their injury. A proper understanding helps anticipate potential liabilities and budget accordingly.”