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Types of work injury compensation

Workers’ compensation insurance is a type of insurance that is required for most businesses. It financially compensates workers in the event of a work-related injury or illness. It is usually a “no-fault” insurance policy, meaning that a company’s workers can file claims and be compensated regardless of where the liability for the injury or illness lies.

Typically, a workers’ comp claim needs to be a “covered event” in order for the insurance company to provide financial compensation. This simply means that there are requirements on what types of injuries and illness for which a worker may file. One of the biggest requirements is that the injury or illness must have occurred as a direct result of work-related activities; a worker cannot file a claim, for example, for an injury sustained at home, or an illness contracted from friends.

There are typically three categories of work injury compensation:

  • Medical care
  • Temporary disability benefits
  • Permanent disability benefits

Medical care includes all expenses related to immediate medical issues: doctor’s or hospital visits, prescription costs, scans, or tests. When an employee falls at work, for example, they may need to get an X-ray and see a doctor right away. As long as the employer files a claim for the employee in a timely fashion, these would likely be covered by workers’ compensation. The employee may need several days off of work, but then they would likely be able to return to their pre-injury job without issue.

Temporary and permanent disability benefits include longer-term financial compensation for injuries and illnesses that either temporarily or permanently prevent the employee from doing their normal job. Generally, workers’ compensation disability payments are made on a regular basis, such as every two weeks, over a specific period of time.

Both temporary and permanent disability benefits may be broken down further into partial and total disability. Partial disability means that the worker has experienced some kind of injury that prevents them from using a specific part of their body, but does not preclude them from working entirely. For example, a permanent partial disability means a worker has permanently lost the use of one part of their body typically needed for their job. This might mean that they may continue working in some capacity, but might need some accommodations, such as light work or limited hours. On the other hand, a total disability means that the employee has experienced a debilitating injury, one that prevents them from doing their job entirely. For instance, a temporary total disability means that for a period of time, the worker is not able to do their pre-injury job at all.

Injured Worker Coverage

Check out our coverage details and benefits for CompSource Mutual policy holders and injured workers.

Other types of workers’ compensation

In addition to work injury compensation, many workers’ compensation policies also include non-medical benefits for employees. Some common benefits include:

  • Supplemental job displacement benefits
  • Death benefits

Supplemental job displacement benefits are not always available through workers’ comp, and may be limited in certain ways, depending on the policy and the state. This category includes a few different non-medical benefits, including compensation for missed wages and job retraining. Some employees, particularly those who have experienced a partial disability, may need to learn new job skills, adjust to a new role, or gain a new certification as a result of their work-related injury or illness. Some of these might be covered by workers’ compensation.

Death benefits are workers’ compensation benefits that are made available to the deceased worker’s family and dependents. These benefits can include both regular benefits payments as well as lump payments and are usually reserved for burial and funeral costs. If the worker had a family that depended on their income, the family may receive weekly workers’ comp payments for a certain period of time.

The importance of workers’ comp for employers

For employers, being part of an insurance plan is not only mandatory: it’s essential for running a business. Particularly in high-risk industries, such as forestry or construction, employee injuries could be frequent and very costly. Paying a monthly premium to be part of an insurance plan that covers these costs is a small price to pay for long-term security and worker safety. It may be wise to partner with a workers’ comp provider that also invests in employee safety training and resources like CompSource Mutual.

To calculate workers’ comp premium payments for employers, workers’ comp insurance companies usually use a complex formula that helps create customized rates. Some of the factors that go into this formula include:

  • The employer’s total payroll
  • The employer’s industry
  • The employer’s history of workers’ comp claims

The total payroll is one of the most important indicators of how much an employer will pay in insurance premiums. The insurance company will simply multiply the total payroll by a certain rate (usually determined by the company or the state). This has the effect of increasing total premium rates for employers with many employees.

The industry also determines how much an employer will pay. If the employer’s company is within a high-risk industry, that extra potential for risk will be added into the equation. Insurance companies assign every industry and job type a class code, which has the level of risk baked into it. Employers in lower-risk industries will be assigned a class code that reflects the lower level of risk.

The employer’s past history of workers’ comp claims is also reflected in a single number, usually referred to as the experience modification rate or mod rate. Insurance companies typically assign a mod rate to companies that have at least two years’ worth of workers’ comp claims. The insurance company looks at the claims and determines whether the company should receive a penalty (or “credit mod”), a discount (or “debit mod”), or neither, or their premium amount. A business may receive a credit mod if they have a history of filing lots of workers’ comp claims; this pattern may indicate a history of unsafe working conditions, which can become costly for the insurance company. In contrast, a business with a history of filing very few workers’ comp claims may receive a debit mod. The mod rate exists to help customize premium rates and right-size an insurance plan to a particular business.

Why CompSource Mutual

CompSource Mutual has served Oklahoma businesses – large and small – for more than eight decades. Our expertise spans hundreds of industries – so our team knows how to get you coverage that makes sense at a fair price. We’re proud to help protect Oklahoma workers because we serve the communities where we live. When you partner with us, you partner with neighbors.

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About Us

Learn more about CompSource Mutual, proudly provided workers’ compensation insurance coverage to Oklahoma businesses for more than 85 years.

The most common types of claims are for injuries: strains and contusions make up 50% of all workers’ comp claims.

The five types of workers’ compensation benefits are: medical care, temporary disability benefits, permanent disability benefits, supplemental job displacement benefits, and death benefits. Injured workers may be entitled to one or more of these benefits.

The first step is to seek medical treatment and inform the employer or supervisor as soon as possible. The employer should then contact the workers’ compensation insurance company and file a claim on behalf of their employee. Employees should make sure to give the original medical bills to the employer and keep copies for reference.

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