Workers compensation insurance

Workers’ Compensation Insurance

Almost every business in the United States that has employees has to handle the problem of workers’ compensation. Most states (with a few important exceptions) essentially require employers to purchase an insurance policy to handle their statutory obligations to workers who are injured or made ill due to a workplace exposure. Whether your business is small or large, handling the expense and effort of meeting those statutory obligations is an ever-present challenge.

Workers’ compensation requirements in the United States began early in the 20th century, back in 1911. Before then, workers who’d been injured or made ill on the job had to take legal action against their employers, resulting in a system that simultaneously made it difficult for workers to obtain compensation for such injuries and yet exposed employers to potentially devastating financial penalties under the tort system.

But beginning in 1911, an historic compromise solution was devised by the various states. Wisconsin was the first, but other states quickly followed, enacting a «no fault» system intended to make sure workers received fair and prompt medical treatment and financial compensation for workplace injuries and illness. This compromise system also established limits on the obligations of employers for these workplace exposures, so that the costs could be made more predictable and affordable.

Today, modern workers’ comp laws provide fairly comprehensive and specific benefits to workers who suffer workplace injury or illness. Benefits include medical expenses, death benefits, lost wages, and vocational rehabilitation. Failure to carry workers’ compensation insurance or otherwise meet a state’s regulations in this regard can leave an employer exposed not only to paying these benefits out of pocket, but also to paying penalties levied by the states.

In most jurisdictions, employers can meet their workers’ compensation obligations by purchasing an insurance policy from an insurance company. However, five states and two U.S. territories (North Dakota, Ohio, Puerto Rico, the U.S. Virgin Islands, Washington, West Virginia, or Wyoming) require employers to get coverage exclusively through state-operated funds. If you’re an employer doing business in any of these jurisdictions, you need to obtain coverage from the specified government-run fund. These are commonly called monopoly state funds. A business cannot meet its workers’ compensation obligations in these jurisdictions with private insurance.

Since workers’ compensation is primarily regulated by the individual states and territories, there’s no single cohesive set of rules governing benefits, coverage or premium computation. Even if you have considerable experience in dealing with one state’s workers’ compensation system, if your business expands to a different state, you can easily find yourself dealing with very different rules.

So who needs workers’ comp insurance? That may be the first important question that a business needs to address, because not every business is required to purchase workers’ compensation insurance. Generally speaking, sole proprietors and partnerships aren’t required to purchase workers’ compensation insurance unless and until they have employees who aren’t owners. Most states will allow sole proprietors and partners to cover themselves for workers’ compensation if they choose to, but it isn’t required. (An important note, though-these rules vary from state to state and can change over time. So it’s always a good idea to check with your particular state’s regulatory agency to make sure what the rules are for your state jurisdiction.)

Some states don’t require an employee to be covered if he or she is paid solely by commission. Again, check with the workers’ compensation regulators in your particular state to see how they handle this.

A general rule is that if you have employees who aren’t owners of the company, you probably need workers’ compensation insurance. Speaking of employees, here’s a potential trap to be aware of and avoid: Under most state’s workers’ compensation laws, you might have employees you don’t know about. That’s because most states will treat an uninsured contractor or subcontractor as your employee if he or she is injured while doing work for your company.

The standard workers’ compensation insurance policy is a unique insurance contract in many respects. Unlike other liability insurance policies, it doesn’t have a maximum dollar amount limit to its primary coverage. Your auto insurance policy, for example, has certain specified maximum amounts the policy covers per accident; if the cost of a particular accident exceeds that limit, you’ll need to look elsewhere for those additional dollars (either your own pocket or an excess or umbrella liability policy). Workers’ compensation insurance policies have a dollar limit also, but only for Part Two of the coverage, employers’ liability. But Part One—the part that responds to an employer’s statutory workers’ compensation liability—has no set limit. Once the policy is in force, the insurance company is responsible for all that employer’s claims that arise for workers’ compensation benefits in the states covered by the policy.

When it comes to controlling workers’ comp costs, here are some particular areas you may want to focus on to make sure your insurance costs aren’t out of control:

Determine if you’re in an assigned risk plan. Sometimes an insurance agent handling the workers’ compensation insurance for a small employer doesn’t make it clear that the policy procured is an assigned risk policy. And in many states, the rates and premium for an assigned risk policy are much, much higher than for the same policy written through the voluntary market. An assigned risk policy doesn’t look different from any other workers’ comp policy, except for some subtle differences. So make it a point to insist on knowing if your policy has been written through an assigned risk plan.

If you’re in an assigned risk plan, check with your state’s insurance regulators to see if assigned risk policies in your state have higher rates and premiums. If this is the case, then do everything in your power to find coverage outside the assigned risk plan. Talk with other agents, talk with direct-writing insurance companies, talk with employee leasing companies, investigate group self-insurance programs available in your state-but don’t let it be your agent’s responsibility to get you out of the assigned risk plan. Your agent just may not have a viable alternative for you, but that doesn’t mean that such an alternative doesn’t exist.

Check what credits may be available to you in your state. If you’re not in an assigned risk plan, make sure your policy gives you whatever credits you might be eligible for in your state. If your state offers credits for a drug- and alcohol-free workplace, find out if you’re eligible. If your state offers merit rating, see if you’re eligible for that from an insurer. If your premium is appropriate, make sure you’re getting the proper experience modification factor. If your state offers a small-deductible credit, look into obtaining it.

Insist on getting audit workpapers after any audit. If the insurance company sends out an auditor to determine your final premium, make sure to request a copy of the audit work papers so you can review them carefully and make sure payroll computation adjusts overtime properly and allocates payroll of different employees correctly.

Check into alternative sources of workers’ compensation insurance. Many business and trade associations sponsor insurance programs that include workers’ compensation insurance. Check into all organizations to which you belong or that you might be eligible to join; they may offer sponsored insurance programs that could reduce your rates or premium.

Workplace safety is also a necessary part of any program to control the cost of workers’ compensation insurance. Here are some tried and true steps that employers can take to improve their workplace safety:

Discuss safety at every opportunity. Make workplace safety efforts an important part of every meeting. Don’t just make it a part of your managers’ meetings-make it a constant topic at meetings with workers. Make sure you communicate to them why safety is so vital, and how it affects the cost of workers’ compensation coverage and thus the bottom-line of the company. You might be amazed at how many of your employees don’t really understand how expensive workers’ compensation coverage is for the company-or even that it’s a cost for the company at all. Some employees think it’s just some kind of government program that doesn’t really translate back to direct costs for the company. So share information about the cost of the company’s workers’ compensation insurance and how the cost of claims drives up that cost. Post the company’s safety goals, and how well the company is doing in regard to meeting those goals. Compare current injury information (without disclosing confidential information about injured workers) with information on recent years.

Examine trends in workplace injuries. You can’t rely solely on your insurance company to analyze this data and alert you to trends you need to address. Get all the information you can about what kinds of claims are occurring and in what part of your operations. Only by understanding what’s causing your claims can you begin to address the causes. It’s a terribly overworked cliché, but it’s also very true: Safety is no accident. It takes planning, effort and thought.

Workers’ compensation insurance can be the difference between a normal insurance payout and a crushing lawsuit. Workers’ comp protects your business and provides your employees with insurance payouts if they are ever injured on the job. Many states require some form of workers’ compensation coverage, depending on what industry your business operates in. Businesses in the construction industry, for example, are almost universally required to have workers’ compensation insurance.

Despite these requirements, small business insurance company Insureon conducted a study of the kinds of insurance policies small businesses enroll in. It found that only 17 percent of small businesses polled had workers’ compensation insurance.

«One reason could be because some of these businesses are owned by sole proprietors who aren’t required to purchase this policy,» said Jeff Somers, president of Insureon. «However, in other cases, small business owners may simply think the level of risk they face is small because of the size of their business.»

It’s crucial to know whether your business is required to have workers’ comp insurance, which depends on what state you operate in. Even if you’re running a business that doesn’t require the same kind of physical commitment as a construction or labor-based job, you may still be required to carry insurance. You can start by learning your state’s laws with the NFIB’s guide to workers’ comp laws.

Another important factor is whether your business operates in multiple states. Mitchell Sharp, marketing associate with The Insurance Shop, said that while laws may vary widely from state to state, businesses operating in multiple states need to understand that their policy may be more complicated.

«If a business operates in multiple states, it is important to bring this to the attention of your agent during the quoting process,» he said. «Speaking long and honestly with your insurance agent about all the issues your business faces can eliminate a lot of headaches down the road when a claim occurs.»

If your small business is expanding to the point where you need to hire an employee, you’ll need to read up on federal and state laws regarding workers compensation insurance.

Workers compensation is an insurance program set up to provide workers who were injured on the job benefits to make up for lost wages while they’re out taking care of their injury.

According to entrepreneur.com, areas it covers include:

  • Injuries or loss of limbs
  • Illnesses, like emphysema
  • Injuries caused at work, like repetitive motion injuries
  • Medical treatment
  • Rehabilitation needed so employees can return to work
  • Lost wages (up to two-thirds of the employee’s salary)
  • Death
  • Liability insurance for the company for lawsuits filed by injured employees

While it might seem like just one more annoying business expense, offering workers’ compensation can actually protect you from litigation should an employee become injured or sick as a result of the job. Every state but Texas requires companies to carry workers compensation insurance — either through a private insurer or the state, or, the business can elect to be self-insured.

The cost for workers compensation insurance varies by provider and industry (high-risk jobs like roofing or construction carry higher premiums than office jobs, for instance). In addition, a company’s premiums can either increase or decrease depending on the number of claims filed.

Business owners can help reduce claims and lower premiums by :

  • Accessing the safety of the work environment by investigating how safe the equipment is, whether it needs to be repaired or replaced, offering safety gear where needed and providing ergonomically friendly office equipment.
  • Creating a safe work environment by training all employees on workplace safety, offering updates and tips on workplace safety, and incentivizing employees’ accident-free work.
  • Getting injured employees back to work faster.
  • Starting an employee wellness program to encourage healthy living and fitness, which should reduce the number of employees injured on the job.

Below are six myths and facts every employer should know about workers compensation insurance:

Myths

1. Once the workers comp has been paid, the employer has no more responsibilities. By staying in close contact with their employees early and often during the recovery phase, business owners can better gauge when the employee will be able to return to work, according to an article on LexisNexis.com. Instituting a return-to-work program can help reduce the number of days lost to injury or illness, and as a result increase productivity. Such a program also helps reduce any future increases in workers comp and disability insurance (when you reduce lost wages, the number of claims drop, which means your premiums drop, too).

2. Only larger businesses are required to carry workers compensation insurance. Again, laws vary by state, but in many states a business needs only have one employee to meet the requirement for workers compensation. Coverage requirements can also be dependent on type of business; for example, in Missouri, the law states that for most companies there must be a minimum of five employees before coverage is required, but if that company is in the construction industry, the minimum is one employee.

3. Workers compensation fraud is common. While the media fueled these claims by the insurance industry, studies show that only 1 to 2 percent of claims are fraudulent. The insurance industry estimates fraudulent claims cost companies $5 billion annually, in 2000. But a team of independent researchers estimates the national price tag is probably closer to $1.2 billion, according to an article on PBS.org.

4. Having employees fill out 1099 forms is a way to avoid paying workers compensation. Some small businesses might be under the impression that if they have their employers fill out 1099 forms then they’re classified as independent contractors, and therefore do not require coverage. There is a set of guidelines a person must meet to be classified as an independent contractor, and if state or IRS investigators discover that workers classified as independent contractors are, in fact, employees, the business could face tax penalties and in some states be held criminally liable.

Facts

5. Workers can be paid for an injury that occurred at work, even if it was partially their fault. While employees don’t have free reign to injure themselves on purpose in order to collect benefits, if the injury rises out of or is within the scope of their employment — even if they might have been careless — then they’re covered. If an employee receives benefits for sustaining injury while under the influence of drugs or alcohol, he or she most likely will not be covered.

6. An employee can collect benefits, even if they weren’t at the workplace when they were injured. According to FindLaw.com, while the laws vary by state, generally any time an employee is injured within the scope of performing their job  even if they are not at their workplace  they’re covered. Examples include  a salesperson who is injured at a the hotel he’s staying at for business purposes or an employee who’s injured while out running an errand on behalf of the company. Employees are also typically covered if they’re injured while attending a company-sponsored event (ie: a company picnic, retreat, etc.). On the flip side, workers comp does not cover employees who were injured while on break, even if they are on company property.

Get Workers’ Comp for your small business

Workers’ compensation insurance (workers’ comp or workman’s compensation insurance) is a mandatory type of insurance carried by many businesses. Get a workers’ comp insurance quote with the Progressive Advantage® Business Program and better protect your business from medical costs and a portion of lost wages for an employee who becomes injured or ill on the job.

Who needs workers’ compensation insurance?

Workers’ comp insurance is required by law in almost every state. These laws are designed to ensure payment by employers for some part of the cost of injuries, or in some cases, of occupational diseases, received by employees in the course of their work.

Workers’ comp insurance can also protect your business from being sued by employees for workplace conditions that can cause an injury or illness.

Workers’ comp basics

Workers’ comp insurance typically only covers injuries or illnesses when they occur as a result of duties performed on the job or while at work. Examples of injuries that may be covered by workers’ comp include injuries caused by lifting heavy equipment, slipping on a wet or oily surface, or sustaining injury due to fires or explosions.

Many state workers’ comp programs do not provide coverage for injuries that occur while an employee is not acting within the scope of employment — such as playing football with friends on a day off.

Protecting Your Employees and Your Business

A key part of running your business is keeping employees safe at work. However, if a worker does suffer an injury, workers compensation coverage provides you and your employees with important protection.

Workers compensation coverage is a state-mandated insurance program that covers lost wages and medical treatment resulting from an employee’s work-related injury or illness. It also covers services needed to help an employee recover and return to work.

A Leader in Workers Compensation

As the #1 preferred business insurance provider1 and one of the nation’s leading carriers of workers compensation, we have the knowledge and resources necessary to:

  • Assist injured workers in obtaining necessary medications for work-related injuries without out-of-pocket expenses
  • Deliver top claims services with consistently superior outcomes
  • Provide quality, affordable treatment for injured workers from our network of local medical providers

Proactive Risk Control Solutions

The most effective way to lower your total cost of risk is to prevent accidents from happening. Our full slate of risk control services will help you do exactly that.

Resolving Claims Effectively and Efficiently

We know that every minute of lost productivity hurts your business, so we take pride in the fact that we close claims faster and at lower cost than the industry average.2 Our expertise results in fewer days out of work for your employees and a significantly lower cost of risk for your business.

By employing highly trained specialists and sophisticated modeling techniques, we resolve claims quickly and effectively. Learn more about our claims services.

Looking for an integrated solution to also manage non-work related injuries?  Learn more about our group disability and absence management employee benefits offerings.

What is workers’ compensation insurance?

Workers’ compensation insurance is likely to be an insurance policy obtained by a company to cover the medical costs and lost wages for its employees’ work-related injuries and illnesses. In the U.S. each state determines the «worker comp» insurance that companies must provide.

The cost of the workers’ compensation insurance is paid by the employer. Many view the cost as another fringe benefit and will include the cost in its fringe benefit rate. Hence, the cost of workers’ compensation insurance for production workers will be an additional product cost. The cost of workers’ compensation insurance for the office staff will be a period cost and will be expensed immediately as part of SG&A.

The cost of workers’ compensation insurance varies by the type of work performed, each employee’s annual pay, and the company’s experience rating. In other words, the cost of workers’ compensation insurance will be highest when the work performed is dangerous, the employees in those jobs have high annual pay, and the company has a history of many injuries. On the other hand, the workers’ compensation insurance cost will be very low for an office clerk who never enters the factory area.

It is important not to confuse worker comp with unemployment comp. 

It’s your job to keep employees safe at work. However, accidents happen. Sometimes employees get injured or become ill on the job, and that’s why we have Workers Compensation Insurance.

This insurance covers medical costs and lost wages, as well as things like rehabilitation or physical therapy. It’s mandatory in many states, and highly recommended for all employers.

Read on to find out more about this type of coverage and what your business should look for in a policy.

What Is Workers Compensation Insurance?

Often called “Workman’s Comp,” this insurance has been available in the U.S. since 1949. This type of insurance provides wage replacement and medical benefits to employees who are injured at work. In exchange, employees relinquish their right to sue their employer for negligence. Therefore, Workers Compensation Insurance protects employers from costly lawsuits, while also assuring employees that they are guaranteed some coverage in case of illness or injury on the job.

Workers Compensation Insurance is mandatory in most U.S. states, and laws requiring that businesses hold these policies are intended to eliminate the need for litigation. Employees who are injured or become disabled at work will not need to cover payment of their own medical bills, and will receive monetary compensation to cover loss of wages. This compensation might cover a portion of wages while they are out recovering from an injury, or it might last longer in situations where employees have suffered permanent physical damage.

Many states, however, offer an exception for businesses with a very small number of employees. For example, if you have three or less employees in Alabama, your business is not required to carry it. However, if you are based in Colorado, all public and private employers must provide coverage for their employees if one or more full or part-time persons are employed. In Illinois, the law is even more strictly worded: Workers Compensation Insurance is required in “every work situation. Additionally in some states, such as NY, failure to provide workers compensation results in strict and heavy fines applied by the state.

Some other common exemptions from mandated insurance are for agricultural employees, corporations or exempted members of limited liability companies or LLCs.

Advantages to employees and employers​.

Workers’ compensation insurance is part of Finnish social security.

It provides cover for all employees and compensation is paid, in accordance with the Employment Accidents Insurance Act, for injuries resulting from an accident at work or an occupational disease.

STATUTORY WORKERS’ COMPENSATION INSURANCE

The compensations paid from the statutory workers’ compensation insurance take precedence over compensations from other insurance systems.

In Finland, the statutory workers’ compensation insurance is administered by private accident insurance companies, such as If P&C Insurance. Consequently, employers in the private and public sector take out insurance from these private accident insurance companies.

Workers’ Compensation Insurance

What Is It?

Workers’ Compensation Insurance can pay for three things when an employee is injured at work: medical bills, recovery costs, and partial missed wages. If an employee dies, Workers’ Comp can cover funeral costs and benefits to the worker’s family. Depending on state laws and contract requirements, you may need this policy to cover employees, contractors, freelancers, or even yourself.

Workers’ Comp (formerly «workman’s comp») emerged from a «grand bargain» between business owners and workers. Business owners were tired of being sued by injured workers. Workers were tired of being injured.

So Workers’ Comp Insurance was designed to help pay for work injuries and illnesses without the rigmarole of a lawsuit. This liability insurance policy can help your business do three things:

  1. Pay for medical expenses and replacement wages when employees are injured at work.
  2. Comply with state Workers’ Comp laws.
  3. Pay for legal expenses if an employee sues over a work injury the policy doesn’t cover.

Most states require employers to buy Workers’ Compensation Insurance as soon as they hire their first employee. Even when that’s not the case, it’s smart to have this policy, because the cost of workplace injuries is substantial:

  • The average workplace injury claim costs $36,551, according to the National Safety Council [PDF].
  • Recovering from a workplace injury took a median of nine days in 2014, according to the Bureau of Labor Statistics [PDF].
  • Productivity losses come to about $2,660 per hourly worker, according to a report from workforce solution company Circadian.

The takeaway: workman’s comp injuries cost small businesses in lost productivity. Without insurance, those costs would be compounded by employee medical expenses and missed wages.

Workers’ compensation insurance pays for medical care and rehabilitation for employees who are injured on the job or contract a work-related illness.  Workers’ compensation also covers a portion of an employee’s lost wages, disability benefits and death benefits for the dependents of employees killed in work-related accidents.

Workers’ compensation covers all of the employees of a business, except independent contractors. Special provisions must be made if employees work out-of-state.

Workers’ compensation is a no-fault system.  This means injured employees need not sue their employers to receive compensation. Compensation is automatic for covered benefits. Except in cases of extreme negligence, employers are generally protected from liability due to work-related injuries and illnesses. For example, if an employee is hurt on the job, the injury is immediately reported to the workers’ compensation insurer.  The employee receives whatever medical care is needed and the insurer pays the bills. If the employee cannot work for a limited period of time because of the injury, the insurer pays the employee a portion of his or her lost wages.  If the employee cannot return to work because of a permanent injury, the insurer pays to train the employee for another job.  If the employee dies because of the injury, the insurer pays death benefits to the worker’s dependents.

Who Needs Workers’ Compensation?

Employers in all states except Texas and New Jersey are required by law to have workers’ compensation insurance.  New Jersey, employers that do not have workers’ compensation coverage can suffer penalties so severe that the obligation is optional in theory only.

Each state sets its own benefit levels, so coverage does not differ among various workers’ compensation insurers within a state.  In North Dakota, Washington, Wyoming and Ohio only the state can sell workers’ compensation coverage.

Several states operate a worker’s compensation fund that serves as a workers’ compensation insurance company for employers in the state. These funds are available to ensure that workers’ compensation insurance is available to all employers in the state, even those that may have difficulty buying coverage from a commercial carrier.

What Affects the Cost of the Policy?

A company’s payroll is one of the factors used to calculate an employer’s premium. The higher your payroll, the higher your premium will be.

The kind of work your employees do also affects your premium cost.  Employers must report to a workers’ compensation insurer the job classification of each of their employees.  Generally, premiums are more costly for employees with jobs that involve a greater amount of risk.

For example, the premium for a construction worker would usually be higher than the premium for an administrative assistant.

With very few exceptions, if you have employees you need Workers Compensation insurance.Workers Compensation pays for medical expenses and lost wages when a worker is injured in the scope of his or her employment. Workers Compensation is a “no fault” coverage which means that if a worker is legitimately injured at work, the policy will pay, even if the accident was the employee’s fault. The compensating trade-off for employers is that in most cases injured workers may not sue their employer. Workers Compensation is designed to be their sole remedy.

Medium and large employers have an Experience Modification Factor that is unique to them. This factor, which is calculated by a disinterested third party, is a multiplier that is applied to the premium. It can be neutral (1.00), a credit (.99 or less), or a debit (1.01 or higher) and is based on the employers claims experience. An employer with a 1.50 mod factor will, on average, pay 50% more than his competitor with average loss experience. The goal is always to achieve a lower Experience Modification Factor. The only way to do that is to minimize the frequency and severity of workplace injuries, and Hortica will help!

Hortica Advantages

  • In most states, Hortica maintains preferred provider panels. These providers deliver excellent cost-effective medical care with the goal of getting injured workers back to work as quickly as possible.
  • Hortica utilizes Nurse Case Managers to assess medical information and determine the medical necessity of proposed treatment plans. They also coordinate plans to get injured employees back to work as quickly as possible.
  • Hortica Loss Control experts identify safety hazards and conduct industry-specific safety training programs. They also assist employers with the development of comprehensive safety plans.
  • Numerous bi-lingual training modules are available at no cost to Hortica customers.
  • Pay-As-You-Go premium payment plans are available for businesses with payrolls that fluctuate seasonally. (Size restrictions may apply.)

How to Get Workmans’ Comp Insurance

Workers’ comp insurance policies are purchased through a private commercial carrier—that is, an insurance company. These are usually the same companies that offer other types of business insurance.

Workmans’ comp insurance, also referred to as workers’ comp insurance, provides benefits to employees for work related injuries or illnesses including medical care and wages lost from work. This insurance coverage also can cover a deceased workers’ family with a financial benefit. If that family chooses to sue your company, workmans’ comp insurance can also help cover the related legal fees.

On occasion, an employer may be deemed an excessive risk by insurance companies and fail to qualify for workers’ comp insurance. For these cases, some states have established their own assigned-risk workers’ compensation insurance programs, setting up a special fund that essentially serves as a “workers’ comp insurer of last resort” for companies who can’t get insurance on their own.

Generally, a state governing board will oversee public/private combinations of workers’ compensation systems. These boards go by several names, such as «quasi-judicial agencies» or «workers’ compensation commissions.»

When employees suffer a work related illness or injury, Workers’ Compensation Insurance from The Hartford helps cover wages and medical benefits and gives them access to experienced, caring professionals at every step of the way.

Buy Workmans’ Comp Insurance

In most states, the cost of Workers’ Compensation insurance can vary between insurance companies as they compete for customers. Despite the variability, all insurance companies base Workers’ Compensation premiums on the amount of payroll an employer has as well as how dangerous the work is. Learn more about the cost of your business with a workmans’ comp quote from The Hartford.

Buying workmans’ comp insurance is essential when it comes to protecting your business. Workers’ Comp insurance helps cover employees for work-related injuries and illnesses, it can help mitigate the possibility of employees bringing suits against your business for work-related injuries and illnesses, and it helps protect your business by keeping it compliant with state Workers’ Comp regulations. Learn more about workmans’ comp insurance and what is required in specific states.

WORKERS COMPENSATION INSURANCE

As a business owner, you do everything you can to protect your employees from potential dangers, but do you have workers compensation protection? Most business owners understand that workers compensation is important, but did you know that if you have employees, it is required by law for most businesses to have coverage?

Workers compensation is a type of insurance coverage that protects your employees in case of injury or disease during the course of employment. Policies can provide coverage for:

    • Medical expenses
    • Lost income/wages
    • Rehabilitation costs
    • Death benefits
    • And more…

For anyone who is classified as an employee, it is required by law to provide them with workers compensation coverage. Employees can opt out of coverage, but if you do not offer it, you can be fined up to $2,500 a day and can face a Class D felony charge with a mandatory minimum one year prison sentence. Termination of an employee who is injured while working and/or who files a workers compensation claim is also illegal. As a rule, a company with five or more employees is mandated to purchase workers compensation insurance to cover medical expenses, permanent disability, and a portion of the injured employee’s wages.

Having workers compensation coverage can save you and your business from costly lawsuits and employee issues. Workers compensation insurance protects your business AND your employees, who are oftentimes a huge part of the framework of a company. For more information about workers comp and what it does for your company, contact The Buren Insurance Group, Inc. today!

Workers compensation insurance

If a work-related accident or illness occurs, work health and safety (WHS) laws require that workers can access first aid, workers’ compensation and return-to-work rehabilitation.

It’s your responsibility as an employer to:

  • maintain a safe workplace
  • maintain current and adequate workers’ compensation insurance
  • protect yourself and your workers from financial hardship in the event of a workplace injury.

As an employer, you need to maintain current and adequate workers’ compensation insurance to protect you and your workers against financial hardship as a result of a workplace accident.

Professional Help with Your Workers’ Compensation Plan in Minnesota

One of the biggest concerns with Minnesota businesses today is operating costs, and workers compensation premiums can be a major expense. However, many companies adopt the strategy of accepting bids for their insurance and ultimately go with the lowest price. This can be a huge mistake for a number of reasons.

Let’s take the case of fictional company ABC to demonstrate.

Company ABC was a medium sized electronics manufacturing company with a growing base of customers and recently they expanded into other parts of the Midwest. The President, David G, was very concerned about costs and tried his best to run a lean company. In fact, he had many measures in place to ensure high quality and recently made major changes which greatly increased profits for the previous quarter.

To maintain efficiency, he decided to use the lowest workman’s comp premiums possible. To David, this seemed like the most efficient strategy at the time. However, David made the same mistakes many businesses owners make by assuming the lowest premiums was the most important factor. He failed to realize that he had two employees currently off work and they were preparing lawsuits against the company. This resulted in a lot of unnecessary legal costs, which could have been avoided if his HR director had handled matters differently.

After reaching a settlement with the employees, David met a man at a local donut shop, and they talked about workers’ comp issues. The man was a CWCA (Certified Work Comp Advisor) and showed David all the benefits his program had to offer. David decided to try it and within six months, lost time accidents had dropped off substantially because he now had the benefits of professional help. Let’s talk about workman compensation, what it is and the benefits you can receive from a CWCA at Insurance Brokers of MN.

What is Workers’ Compensation?

Workman compensation is insurance to compensate employees for time off, due to an on the job injury or job related illness or injury. This insurance is mandatory. The coverage allows for medical care, reimbursement for lost wages, and death benefits.

Who Needs Workers’ Compensation Insurance?

Any business with employees must purchase this coverage or self-insure. This is the law. Even if you only employee one person part-time, you must provide this insurance coverage. Failure to comply can result in major penalties. At Insurance Brokers of MN, Inc. we are licensed to write workers’ compensation in many states including Minnesota and surrounding states like: Wisconsin, Iowa, South Dakota, North Dakota.

Standard Coverage for Workers’ Comp

Coverage includes hospital and medical bills. It also makes disability payments and may cover expenses like rehabilitation and job training. Death benefits are also provided.

Workers’ Compensation Insurance

Workers’ compensation insurance in Colorado works two ways: it protect your employees and it protects your business. If an employee is injured on the job, work comp insurance will pay for medical care, disability — whether permanent or temporary, and death benefits. If you are found to be liable for employee injury or illness, workers’ compensation will protect you and your business. This type of insurance is often mandatory.

Work comp insurance guidance, options, and competitive quotes

Check with a work comp agent at Colorado West Insurance to learn if your business is required to carry workers’ compensation insurance and let us explore coverage options for you. As an independent insurance agent we represent several top rated work comp insurance companies and can get you the right coverage that fits your business insurance budget.

Do you have questions about Workers’ Compensation Insurance?

Contact an insurance specialist at Colorado West Insurance today to answer any questions about Workers’ Compensation Insurance or for a free review and insurance quote for Workers’ Compensation Insurance.

Keeping you productive is what we strive for.

Workers Compensation provides coverage for an employee who suffers an illness or accidental injury resulting from job-related duties. Coverage includes medical and rehabilitation costs and lost wages for employees injured on the job. Organizations that have employees are required by state law to have workers compensation insurance.

Rates are based on three key factors.

  1. The business you are in;
  2. Your frequency and severity of workers compensation claims and how that compares to other companies in the same business; and
  3. How much you pay your employees.

Workers compensation coverage provides three separate limits, for example:

  • per accident for bodily injury by accident
  • policy limit by disease
  • per employee for bodily injury by disease

It also contains coverage for funeral expenses and financial support to dependents as well as reimbursement percentages for lost wages.

In the event an employee’s injuries are not compensable under workers compensation and state law imposes liability on the company for those injuries, the policy will cover the company’s liability.

Commercial Auto Insurance coverage provides a business protection against a financial loss that may occur involving the vehicles your company owns or uses in the course of its operations. Auto policies provide coverage for:

  • physical damage to your company’s cars
  • injuries or damage you inflict on others or their property arising out of the ownership and/or use of your company’s cars
  • medical payments to you and your passengers in your car who are injured.
  • Uninsured / Underinsured Motorists coverage in the event you are injured by a driver who is either uninsured or inadequately insured

Umbrellas provide additional liability protection in the event of catastrophic lawsuits. Umbrellas sit over the limits of specific liability policies in your business portfolio such as business liability, auto liability and employers’ liability.

Workers’ Compensation

Workers’ compensation is a publicly-sponsored system that pays monetary benefits to workers who become injured or disabled in the course of their employment. Workers’ compensation is a type of insurance that offers employees compensation for injuries or disabilities sustained as a result of their employment.

BREAKING DOWN ‘Workers’ Compensation’

By agreeing to receive workers’ compensation, workers also agree to give up their right to sue their employer for negligence. This «compensation bargain» is intended to protect both workers and employers. Workers give up further recourse in exchange for guaranteed compensation, while employers consent to a certain amount of liability while avoiding potentially greater damage of a large-scale negligence lawsuit. All parties (including taxpayers) benefit from avoiding the legal fees needed to process a trial.

Workers’ Comp Coverage

Most compensation plans offer coverage of medical fees related to injuries acquired as a direct result of employment. For example, a construction worker could claim compensation if scaffolding fell on their head, but not if they were in a traffic accident while driving to the job site.  In other situations, workers can receive the equivalent of sick pay while they are on medical leave. If a worker dies as a result of their employment, workers’ compensation also gives payments to their family members or other dependents.

While the «compensation bargain» excludes the possibility of a tort of negligence being issued by employees, this is not to say that compensation is a foregone conclusion. For one thing, it is not always clear whether or not an employer is actually liable for an injury to their worker. Furthermore, working injuries are chronically underreported in some industries.

Legally, there is no penalty for reporting a workplace injury to an employer, but this stipulation is impossible to regulate on an individual level, especially in industries like construction where a worker’s livelihood depends to a degree on their physical abilities. Workers’ compensation payments are also susceptible to insurance fraud: in some cases, workers will sustain an unrelated injury but report that it was sustained on the job.

Workers’ compensation should not be confused with disability insurance or unemployment income; it only pays workers who are injured on the job, while disability insurance pays out regardless of when or where the insured is injured or disabled. Workers’ compensation also does not cover unemployment.  Unlike unemployment income or disability benefits, workers’ compensation is always tax-free.

Workers’ Compensation at the State and Federal Level

In the United States, workers’ compensation policy is usually handled by individual states. The Department of Labor houses an Office of Worker’s Compensation Programs, but it is only responsible for compensation policies for federal employees, longshoremen and coal miners. The lack of federal standards for workers’ compensation has resulted in deeply varied policies for the same kinds of injuries in different parts of the country. Therefore, it is essential for a worker acknowledging and preparing for the possibility of a work-related injury to carefully examine both state and company compensation literature.

Recent studies have shown that workers’ compensation benefits have dropped substantially in a majority of states. Identical injuries can receive radically different kinds of compensation depending on where a worker resides, which makes it all the more important to examine local compensation statutes. Meanwhile, studies have also shown that incommensurate workers’ compensation is closely correlated with persistent income inequality.

Workers Compensation Insurance

Workers Compensation Insurance: Rock Solid Protection at a Great Rate

Having workers compensation insurance coverage isn’t just good for your business, it’s also a legal requirement. Unfortunately it can be hard for business owners to know which policies are right for them, how often they should review their coverage, and what the requirements for employee disclosure and filing are like.

As part of our PEO services, the team at StaffMetrix HR have become experts in Georgia workers compensation. We know how to help our clients find the best insurance, the best ways to navigate Georgia workers compensation state forms, and even how to communicate the details of benefits packages to team members.

Why Choose Us As Your Georgia Workers Compensation Partner?

If you’ve ever worried that you don’t have the right insurance to meet your business needs and legal requirements, it’s time to get the right advice. Let us help you with Atlanta Georgia workers compensation and you’ll get:

  • Personalized advice from experienced human resources executives and consultants
  • Affordable workers compensation insurance coverage to keep you and your team protected
  • Timely filing for all required documents to ensure you stay in compliance
  • Regular reviews of your workers compensation insurance package to make sure you’re getting a great rate

You can get insurance anywhere – when you need a partner who will get to know your business needs and help you manage the people side of your organization better, turn to StaffMetrix HR.

Workers Compensation Insurance That Works for You

Having insurance is meaningless if you don’t have the right coverage, or enough of it, when it matters most. Don’t take chances with the future of your company. Let our team of experts help you find the policy and coverage that’s perfect for your needs and budget.

Workers’ Compensation Insurance

Workers’ compensation insurance in Arizona works two ways: it protect your employees and it protects your business. If an employee is injured on the job, workers’ compensation insurance will pay for medical care, disability — whether permanent or temporary, and death benefits. If you are found to be liable for employee injury or illness, workers’ compensation will protect you and your business. This type of insurance is most often mandatory.

Work comp insurance guidance, options, and competitive quotes

Check with a work comp agent at The Arizona Group to learn if your business is required to carry workers’ compensation insurance and let us explore coverage options for you.  We offer several value-added options for our workers’ compensation policyholders.  These include assistance with OSHA compliance, Unit Stat Filings, assistance in lowering mod factors, audit reviews, developing claims protocols, developing employee safety and return to work programs.

As an independent insurance agent we represent several top-rated insurance companies, including CopperPoint Mutual which was formerly the State Compensation Fund, and can get you the right coverage that fits your business insurance budget.

Do you have questions about Workers’ Compensation Insurance?

Contact a Workers’ Compensation Insurance specialist at The Arizona Group today to answer any of your Workers’ Compensation Insurance questions or for a free Workers’ Compensation Insurance review and quote.