What constitutes a work-related injury? State workers compensation laws vary in wording but typically define a workers comp injury as any illness or injury incurred "in the course of employment." This includes industrial accidents, of course, but the injury need not result from one specific event in order to be covered by workers comp insurance. Repetitive stress injuries, such as back strain or carpal tunnel syndrome, are legitimate workers comp claims.

Don't forget that injury definitions vary by state: Some states define workers comp injuries loosely, allowing almost any claim for injuries related to work. In others, it's hard to say whether an employee who is working from home, for example, is entitled to a workers comp claim if she falls down the stairs in her house. (For guidelines in your state, click to the Insure.com Workers Compensation Insurance Law tool.)

"Home workers are really coming to the forefront now in workers comp," says Jim Royles, workers compensation line of business director for product management at The Hartford. "Benefits can be difficult to determine when you're not sure whether they were on the job or not. Now that people don't just work 9-to-5, these issues have to be clarified. But as a general rule, if an employee is working from home, they're covered."

No matter what the problem is, employees hoping to collect workers comp benefits should know that immediately reporting the injury is key. Although workers comp benefits are automatic, they don't start until the insurer knows about the claim. Most states set a time limit for reporting injuries, anywhere from two to 30 days. (In the case of an injury occurring over time, the worker should report it soon after realizing the extent and the cause of the problem.)

Once the injury has been reported, a doctor visit is the next step. Since most states' workers compensation systems allow for managed care, the doctor may be selected by the workers comp insurance company. Some states, however, allow the injured employee to visit his or her own doctor or any other "willing provider" of medical care.

"Whether the employee has a right to choose or we direct him to a network with the best care, the objective is to get him gainfully employed as soon as possible," says Royles. "That's why managed care networks are set up — to get the employee to a doctor or a physical therapist, for an intensity of care that might not be there with just any doctor."

However, in some extreme cases, the employee may be partially or fully disabled by the injury. In that case, they're entitled to compensatory benefits for the length of the disability. If they're permanently out of work because of the injury, they collect wages permanently.

Safety management and loss control

According to the National Council on Compensation Insurance (NCCI), the average cost per workers comp claim in 1996 and 1997 was $10,105 (the latest data available). Motor vehicle accidents were the most costly cause of injury, with an average cost per claim of $19,764. The most costly injuries were amputation, carpal tunnel syndrome, and fractures.

Men are more likely to be hurt on the job than women, filing two thirds of "lost time" claims. Men are also more susceptible to traumatic and permanent injuries, such as those sustained in motor vehicle accidents. Women, by contrast, are more likely to file mental stress and cumulative-injury claims.

Fueled by statistics like these, your workers comp insurer will probably want to come on-site for safety training or safety-management sessions with your managers and employees. They might promote this as a bonus policy feature, and if you're a small company with few safety-management resources, this can be a huge help in reducing injuries and increasing efficiency. But don't forget that it benefits the insurance company, too: Fewer workers comp claims from your company not only means that your workers are healthier, but also that your insurer saves a buck or two.

That doesn't mean you need to rely on the insurance company for loss-control services. If you're a smaller employer, chances are you don't maintain an internal risk management department. There are, however, many independent risk managers and safety consultants who can work with you to implement safety policies for workers comp — good accident-reporting practices, safety training for employees, and meeting OSHA requirements for your industry can help you keep premiums down by having the right procedures (and the right safety record) in place when the insurance company representatives show up.

"We ask clients a number of questions to determine where they are from a loss-prevention standpoint. What safety programs have they established, do they have a drug-testing policy? Myriad issues are related to bottom-line savings in dollars — things the insurance company looks at to determine your premium," explains Steve Smithson, director of loss control services at Summit Consultants of Florida.

"It's not something you talk about once a month," Smithson says. "Safety should be in everything you do." Smithson emphasizes employers' need for a "safety culture" — practices and policies that can reduce workers comp injury claims from a humanitarian and a financial standpoint. First and foremost in safety management is a "safety committee," a group of managers and workers that discusses aspects of the workplace and what can be done to improve upon safety and health conditions.

"The safety committee should be weighted to the side of the workers," advises Smithson. "They're involved in the day-to-day processes, and can bring ideas to the table on how to make them safer. Involving employees in that kind of forum is extremely important, because they see themselves as being involved in the process and can take that perspective back to the rest of the employees."

Better safety records do pay off

Brenda Vincent of Marsh Advantage America, a small-business specialty arm of Marsh, Inc.'s Seabury & Smith, recalls a contractor with poor workers comp loss experience which paid hefty premiums for its lack of workplace safety. Vincent coupled a safety-management program with a dividend in the workers comp policy. The contractor was encouraged to raise safety awareness with the incentive of a year-end payout, but with a unique twist: Management promised to pay the workers a bonus with the dividend money if the company met safety goals.

"It encouraged the customer to put the program in place and convinced the workers to turn around some sloppy work habits they'd gotten into," says Vincent. "Everybody won. The owners benefited from the better workplace habits, the workers were healthier and got a bonus, and in the long term, the safety program was improved."