Small Business

How to Avoid Workers' Compensations Claims

Updated on November 29, 2019


If you are a small business owner, you might have experience dealing with worker’s compensation. As a small business decision maker, you would want to avoid having to use your worker’s compensation at all as you want your employees to be safe and healthy. Even though worker’s compensation is state-mandated, you can still make smart decisions related to worker’s compensation that will help keep your small business and its employees.

A Little About Worker’s Compensation

Worker’s compensation is a form of insurance that helps business owners by providing wage replacement and medical benefits in the event of an employee getting injured while on the job or sustaining an injury associated with their job. Companies and small businesses are required by law to have worker’s compensation insurance. The details generally vary state by state. Read more about Worker’s compensation.

The best way to avoid worker’s compensation claims is to get proactive–for small businesses that means safety programs that lower the risk of work place accidents.

Addressing Workplace Hazards

OSHA offers a number of resources for small businesses looking to create a safety program that eliminates workplace hazards. They suggest five steps that responsible small business owners can take to keep employees safe.

  • Start by examining OSHA’s safety rules and regulations for your industry. Obviously, construction companies have different risk factors to consider than retail stores. Do your research on what the OSHA requirements are for your small business so you can implement them.
  • Assign responsibilities based on the OSHA rules to staff, so they become safety partners with the small business. If you make them just as responsible for on-the–job safety as the business, they will become vested in these important protocols.
  • Do a workplace analysis to find potential hazards. This is something small businesses should do routinely. Even little things like loose floor tiles represent a potential accident.
  • Create safety solutions. Once you identify the hazards, create policies to eliminate them. Who is responsible for fixing those loose floor tiles?
  • Evaluate your employee training practices to ensure the staff knows how to avoid common workplace issues. A small business might teach the office staff about repetitive injuries, for example, to avoid carpal tunnel claims.

Staying accident-free for small businesses starts with prevention.

Return to Work Programs

Accidents do happen, though, so small businesses should be ready just in case.  “Return-to-Work” programs allow employees to get back to work as soon as they are medically able to reduce worker’s compensation costs and improve productivity.

Return-to-Work plans are about providing support when your employees most need it. They outline policies that go into place should someone get hurt such as:

  • What to do when someone gets hurt – for example, notify senior management and get emergency medical assistance. Most programs include a process flow chart with a list of contacts to improve communication.
  • Set up a transitional employment plan based on the needs of the employee. This allows small businesses to put that person back into service with a modified assignment or even working remotely from home. Transitional employment provides for safe transition back to work.

Hiring a licensed insurance broker is one way small businesses can learn more about avoiding worker’s compensation claims, too. A broker can provide details on things liability insurance for small businesses that reduce your costs, for example.

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