Compensation Claim

Last Updated: April 22, 2019

Definition - What does Compensation Claim mean?

A compensation claim, within the context of Workers' Compensation, is an appeal made by an employee to receive monetary support from an insurance company covering medical costs, rehabilitation services, and lost wages following a work-related injury and/or illness. Individuals are advised to inform their employer about an injury immediately to support grounds in filing a legitimate claim. Workers’ Compensation coverage is a federal mandate designed to protect employers against liabilities prompted, in some cases, by employees falsifying claims to qualify for benefits.

WorkplaceTesting explains Compensation Claim

To many employers, a compensation claim can present ambiguous terms of eligibility when filling out a form to collect payments after an injury occurs. The primary reason for this scenario is attributed to the fact that employees are not obligated to verify with evidence their injury resulted from negligence. Although employee rights vary by state law, a compensation claim form is submitted to a worker compensation board pending approval or denial of compensable income.

A useful approach for employers to establish whether an injury warrants a compensation claim is to refer the injured party to a doctor for immediate medical attention. Company policy guidelines stipulate that an employee has a thirty day window to report their injury to management while, in the interim, seek appropriate medical care.

Although fraudulent claims are rare, employers must still observe for any questionable conduct that might otherwise suggest an employee is committing fraud. For instance, employees failing to keep doctor appointments or missing repeated rehabilitation treatment sessions can be construed as suspect behavior.

To qualify, all compensation claims must coincide with work-related factors intended to promote favorable status of the company. This means if an employee commutes regularly between two department branches and is involved in an automobile accident, sustaining major injuries, the company must make restitution to cover expenses and/or leave time.

This definition was written in the context of Workers' Compensation
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