When a company expands and starts hiring employees, they are required to have workers’ compensation insurance. Workers’ compensation insurance covers the expenses associated with a worker getting injured while on the job. This can include the medical bills from the injury, physical therapy, and lost wages.

To learn more about workers’ compensation, we spoke with Lynn LaGram, assistant vice president of Small Commercial product at The Hartford. Based on premiums, The Hartford is the second biggest provider of workers’ compensation policies in the United States.

The following interview is based on notes from Lynn and I’s conversation and is not a transcription of her exact words.

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What are some common misunderstandings surrounding workers’ compensation insurance?

I think there are two common misunderstandings related to workers’ compensation. One, is that people mistakenly assume workers’ compensation is a commodity. It’s not. Every policy is different. While prices can be comparable across carries, policy features, added programs, claims management and billing options may differ. Secondly, there is sometimes misunderstanding about the scope of what a policy covers. While workers’ compensation can cover medical expenses, workers’ compensation is not medical insurance. If a worker comes down with the flu or gets injured outside of a work situation, worker compensation will not cover any related expenses. On the other hand, if a construction worker, for example, climbs and falls off a ladder while at work, that is when workers’ compensation kicks in. Workers’ compensation can cover the costs of the resulting medical treatments, rehabilitation needed to get the employee back to work, and the worker wages while they are recovering.

Why is worker compensation not a commodity?

I would say there are three important aspects which vary greatly from one company to another:

1. How claims are handled.
2. What payment options are offered.
3. How carriers help companies prevent workplace injuries.

Who handles your employee’s worker compensation claim is an important question. It might not be the company with which you have your policy. Some insurance carriers may not actually manage the claim process. At Hartford, we manage claims in house. Who actually manages claims impacts everything from the speed that claims get processed to the quality of the recovery services that the worker receives. How can small business find out how an insurance carrier handles claims? If they work with an independent insurance agent, the agent can share their experience with the different companies.

Another difference between workers’ compensation providers is how they allow companies to pay for workers’ compensation. With The Hartford, you can make a down payment upfront for workers’ compensation insurance and then “pay as you go”. There are two large benefits to the “pay as you go approach”. First, a company can spread its payments for workers’ compensation over an entire year, which means a better cash flow balance.  Secondly, with the “pay as you go” approach, payments are calculated based on actual payroll. If a company hires more employees than expected, there isn’t a big adjustment payment needed at the end of the policy year.

How does The Hartford help companies avoid workplace injuries?

Part of avoiding workplace injuries is helping small business owners understand their risks and helping them focus on avoiding workplace injuries before they happen. The Hartford offers several cost-savings programs to help promote workplace safety and wellness. One example is our “Shoes for Crews” program, which offers a discount on slip-resistant foot wear. This is ideal for companies working in industries where slips and falls are common. Another program available for a discount is called “Naturally Slim,” a wellness and weight-loss program to help employees reduce risk factors for metabolic syndrome.  A healthy workforce can help contribute to a safer work environment. Lastly, we also have a program that offer discounts for companies who purchase ergonomic office chairs and furniture, to support the back and joint health of their employees.

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