Dissecting the Workers’ Compensation Policy Though required by law, this policy provides multiple advantages for your practice
multiple advantages for a dental practice to purchase workers’ compensation insurance. The reasons are not ranked in order of importance, because they all are important, and the value may vary with each employer depending on your exact circumstances at any given time. Hopefully you will understand the merits of every reason as you read them—rather than having to experience them as a practical matter. But if you do, you’ll be glad you’ve got coverage.
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REASON NO. 1 // To avoid being charged with a Class A misdemeanor and paying a penalty of up to $50,000 to the state of Missouri, Chapter 287 RSMo states that employers with at least five employees must carry workers’ compensation insurance. That includes you, as the employer, and any family members who work in the practice. This is the test that determines whether you are required to carry workers’ compensation insurance; however, an owner may exclude themselves and any family member within the third degree of consanguinity. Example: Counting yourself, there are five workers in your practice. Therefore you must have workers’ compensation insurance but may exclude yourself, as the owner, from coverage which could save you around $90 to $100/ year. But you still must carry workers' compensation on your other employees.
REASON NO. 2 // Providing coverage for your employees in the event of bodily injury by accident or by disease is an important benefit that you, the employer, can provide by virtue of your workers’ compensation policy. There are four basic
22 focus | MAR/APR 2012
side from being required by Missouri state law, there are
C) Rehabilitation benefits provide for physical therapy, and in some cases, vocational rehabilitation for a new type of job.
D) Death or Survivorship benefits will be paid if an employee dies as a result of a job-related incident. A burial allowance and an income benefit to compensate the dependents for the deceased employee’s lost wages are normal and customary.
kinds of benefits described here:
A) Medical benefits provide payment for necessary and reasonable medical treatment. Despite popular belief, health insurance does not cover work-related injuries. Without workers’ compensation insurance, you may be liable for the cost of medical treatment of an injured worker.
B) Disability benefits are intended to compensate employees for lost wages due to the inability to work. After a waiting period, employees receive a percentage of their pay during each week they are unable to work. There are four classes of disability: temporary total, permanent total, temporary partial and permanent partial. Disability can result in a lump- sum settlement in some cases. Again, most small businesses do not carry enough capital reserves or have the ability to pay such large potential sums themselves.
REASON NO. 3 // Employers Liability insurance is another type of coverage provided by a workers’ compensation policy that pays damages other than those in Reason No. 2 as a result of a claim or lawsuit if an employer is found legally liable. This would come into play if an employer were, for instance, found to be negligent. The limits of liability are:
Bodily injury by accident: $100,000/ each accident
Bodily injury by disease: $500,000/ policy limit
Bodily injury by disease: $100,000/ each employee
So if a court judgment for damages exceeded any of the limits shown, you still could be liable for the difference. In most cases of workers’ compensation in a dental practice, the cost to increase the limits of protection above the minimum as shown is very affordable. Instead of opting for the minimum required, it is a good idea to see what the additional cost is to raise the limits of your protection. Defense costs are outside the limits of liability, and it is the duty of the insurance company to defend if there is a covered loss.
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