Some jobs are more dangerous than others and, over the years, there’s been a debate about how to strike a balance between the duty of the employer to offer as safe a working environment as possible and the need to compensate anyone who is injured when that duty is breached. In the middle of the nineteenth century, a number of European countries began to introduce national programs to protect citizens who were injured at work. Rather than allow them to fall into poverty if, through no fault of their own, they were unable to continue working, a financial safety net was introduced.
Between 1855 and 1907, twenty-eight US states introduced laws to allow injured workers to sue their employers. If the courts found the employers negligent, they had to pay compensation. This liability obviously encouraged employers to insure. The drawback to this approach is that the courts overflow with personal injury claims. Worse, it fails to address the need for safety in the workplace and treats every case as if unique. So at the turn of the century, some US states began to introduce statewide compensation laws. By 1949, all US states had a law in place striking a balance between private liability and public compensation.
The problem has always been the amount of fraud in the system. To pay lower premiums, employers lie about how many people they employ and the level of experience the employees have. Employees fake injuries or exaggerate old ones. Nevertheless, with the exception of Texas which has a unique system, all states have introduced a right for employees to receive treatment if they are injured on the job. This has a direct effect on the amount of small business insurance the employers need to buy. The small business pays the relevant premium into the local compensation plan run by the state instead. Where the state-run scheme is comprehensive, it replaces the right of the injured employee to sue the employer for negligence with the right to treatment and compensation from the state. So long as the small business follows the local law, this is a reasonable balance of public and private rights.
A problem has been emerging in the way many of the Workers’ Compensation plans work and there’s an epidemic of opioid addiction as doctors overprescribe medication. The Centers for Disease Control and Prevention are now involved in trying to prevent excessive prescription. For employers looking to re-employ disabled staff, this may be a problem requiring attention from the small business insurance provider. Drug testing as part of the recruitment process and during employment may be expedient. As a national statistic, some 40,000 adults die of drug overdoses every year. Opioid deaths now exceed heroin and cocaine deaths combined. If your small business insurance includes any form of cover that may be invalidated if the employee is an addict, you need to know early. This problem is more common among the injured workforce. Take action now.