Should Your Business Pay For Small Work Comp Claims Out of Pocket

Should your business be paying for minor worker’s compensation claims out of your own pocket?

Occasionally we learn of businesses paying minor claims out of the business account due to a fear of being dropped from their insurance for turning in too many minor claims.

Paying for these claims out of pocket is bad business practice. Without going through the proper channels even on minor claims, you are opening your business up to a litany of insurance and legal ramifications by not submitting workers’ compensation claims in a timely manner.

There are time requirements to submit a claim that may be violated if a business knows of a claim situation and fails to report to the insurance carrier.

What happens when you pay claims out of pocket?

Here is where the situation of paying small workers comp claims without going through your policy provider can get messy:

If an employer takes on a worker’s compensation claim on their own from an injured worker which they believe to only be minor, such as a back injury requiring minor chiropractic treatment, but the injured worker has additional issues afterward, or the issue wasn’t as minor as once thought the business can potentially be liable for the claim as well as being fined from regulatory authorities.

The employee may be outside of their time to file a claim with the carrier, even though they will believe they did the right thing by turning the claim into their employer. At this point, the injured worker could be in need of surgery and it may not be covered. By not submitting the claim to the work comp carrier as soon as the employee brought the issue to the employer’s attention, the employer will may have to pay for a surgery out of pocket, which could be very costly.

The employee may consider litigation at this point because the employer did not follow the proper channels when taking care of the worker’s compensation claim and may have caused more damages at this point.

If you are a business that is taking care of worker’s compensation claims that you deem to be minor on your own, you should stop this practice immediately. It is bad business for you, your employees, and for the worker’s compensation carrier.

Still want to pay small workers’ comp claims out of pocket?

If you want to take care of the small claims on your own, you do have a legitimate way to do so by following these steps:

• Send the claim into the carrier.
• Let them send you a bill for the deductible after reviewing the claim

This is the right way to handle small claims while minimizing risk to your business and give the most benefit to your employees.

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