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How Natural Disasters Can Affect Workers’ Compensation

How Natural Disasters Can Affect Workers’ CompensationBoth the East and West coasts have seen their share of devastation this year. When a natural disaster rolls in, knocking out power, destroying homes and even taking lives, many businesses are forced to limit the scope of their operations or suspend them completely. Employers may be left wondering how an event like this will affect their workers’ compensation premiums and employers liability insurance. Employees may be concerned about the effect it will have on their workers’ comp benefits and necessary care if they were injured prior to the event. Additionally, workers injured while working during a natural disaster or in the immediate aftermath may face additional workplace safety issues that require attention from their employers.

The workers’ compensation system is certainly not immune to challenges following a natural disaster; however there are a number of policies in place that apply to certain scenarios to reduce loss within the workers’ comp system. Employers often look to their workers’ compensation insurance broker, hoping to get answers during the difficult and confusing time following a major disaster. Below are some of the ways natural disasters can affect workers’ compensation.

Workers Injured Prior to a Disaster

One of the most pressing concerns following a natural disaster is ensuring injured workers receive the necessary medical care and benefits they are entitled to. Many states have laws or policies in place that offer protections to workers following a disaster, including for workers’ compensation issues. For example, following Hurricane Irma, many affected states invoked provisions that helped to expedite benefit payments and medical care to injured workers displaced by the hurricane.

Workplace Injuries During Disaster Recovery

Upon returning to work following a natural disaster, workers may be met with an increased amount of workplace hazards to navigate. Additionally, while in post-disaster recovery, employees may face emotional and financial distractions that make it more difficult to concentrate at work. Because of the circumstances, workplace injuries can become more common directly after a natural disaster, so it’s important for employers to focus on the well-being of their employees and come up with a transition plan to ease workers back into their duties while they are in recovery mode.

Temporarily Changing Classifications

The National Council on Compensation Insurance (NCCI) provides that when a natural disaster creates a temporary interruption of normal business activities, this can validate as a change in an insured’s operations, and therefore, can prompt carriers to consider a change in governing classifications if the employer continues to pay its employees while they are unable to work. Once normal business activities are reinstated, the change is reversed. For example, a worker classified in a high-risk occupation may be classified as something lower risk, such as a clerical position, while business operations are suspended. This allows employers to compensate their employees during the recovery period without negatively impacting their year-end premium audits.

About ASIA Workers’ Compensation

Associated Specialty Insurance Agency, Inc. has been “The Workers’ Compensation Specialist for Brokers and Agents” for the past two decades and is committed to providing brokers and insurance agents across the East Coast with expertise and services to develop a Workers’ Compensation policy. For more information about how we can assist you with claims management, anti-fraud measures, and more call (610) 543-5510 to speak with one of our professionals.

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