There are many myths or misconceptions about Pennsylvania Workers' Compensation Insurance that can end up costing business owners time and money. So let's set the record straight on these myths once and for all.
What is Pennsylvania Workers' Compensation (WC) Insurance?
Most states, including PA, require employers to carry WC for their employees. The PA Department of Labor & Industry states, "If you employ workers in Pennsylvania, you must have workers' compensation insurance -- it's the law." This includes both full and part-time employees, even if they are family members. There are very few exceptions.
If a worker is injured in the workplace or becomes ill because of their work environment, Workers' Compensation (WC) helps cover medical costs and lost wages if the employee cannot work. In Pennsylvania, it doesn't matter who or what caused the injury. If the injury or illness occurred during the course of their employment with you, WC would pay those expenses.
WC also limits an injured employee's right to sue an employer directly for damages that injury or illness causes.
Most Common Workers' Compensation Myths
MYTH 1: You don't need WC coverage for your business.
FACT: In Pennsylvania, if you employ even one person, even if that person happens to be your brother-in-law, you probably need to carry WC coverage for that employee. The only exceptions are If ALL employees fall into one or more of the following categories:
- Federal workers
- Railroad workers
- Casual workers
- Persons working out of their own homes or other premises not under the control of management
- Agricultural laborers making less than $1200 per calendar year
- Domestic workers who have not elected to come under the provisions of the Workers' Compensation Act
- Sole proprietors or general partners
- Those who have been given an exemption by the Department of Labor and Industry due to religious beliefs
- Executive officers who have been granted exclusion by the Department of Labor and Industry
- Licensed real estate salespersons or associate real estate brokers affiliated with a licensed real estate broker or a licensed insurance agent affiliated with a licensed insurance agency, under a written agreement, remunerated on a commission-only basis and qualifying as independent contractors for State tax purposes or Federal tax purposes under the Internal Revenue Code of 1986.
If a business does not qualify for one of these exceptions, it must carry Workers' Compensation Insurance for its employees. Failure to do so can result in the employer being required to pay back any costs paid by the Uninsured Employers Guaranty Fund or a work-related injury or illness, including interest, penalties, and fees. An uninsured employer may also face civil and criminal risks that can result in fines and imprisonment.
MYTH 2: Your company must be at fault for Workers' Comp to pay.
FACT: As mentioned above, Pennsylvania WC is a no-fault system. Regardless of the cause of the injury - a faulty machine, a mistake made by an employee, etc., if the injury occurred in the course of their employment, WC will pay.
MYTH 3: An injury must happen on-site to file a WC claim.
FACT: If an employee is injured while driving to a meeting, at a work conference, etc., while conducting business for you, you can (and should) file a WC claim.
MYTH 4: All work-related injuries are covered by Workers' Comp.
FACT: In Pennsylvania, Workers' Compensation claims can be denied to employees whose injuries are caused by the use of illegal drugs or alcohol intoxication.
MYTH 5: Your role ends once the WC claim is made.
FACT: When an injury occurs, you are responsible for submitting the claim form and supporting documentation promptly; however, your responsibilities don't end there.
You also need to manage the WC claim, continue cooperating with your insurance carrier, help ensure the claim is resolved quickly, keep in touch with the injured employee, and consider return-to-work options when appropriate.
MYTH 6: A minor injury is not worth reporting
FACT: Injuries that initially seem minor may become more severe and require additional medical treatment. Not reporting work-related injuries can keep your employees from receiving proper care and put your WC policy at risk.
Reduce Your Workers' Compensation Insurance Cost
Understanding these common myths and working with one of the experienced independent insurance agents at American Insuring Group can help ensure you get the best coverage at the lowest cost. Our independent agents shop the market to help you save on the proper insurance protection for your business.
Contact us today at (800) 947-1270 or (610) 775-3848, or connect with us online.