Even careful employees with conscientious employers sometimes get hurt on the job. Workers compensation policies are there to ensure your employees are well taken care of in their time of need, and that you do not incur overwhelming costs in the wake of an unfortunate event.
What is Workers Compensation Insurance?
Workers compensation insurance shelters you from the costs associated with an on-the-job employee injury. Most workers compensation claims are filed for relatively minor injuries where only coverage for medical bills is needed, but along with doctor’s bills, a workers compensation policy will cover a portion of your employee’s lost wages while they recover from their injury or illness. In more extreme cases, these policies may even cover the cost of occupational training in case your employee is unable to return to their previous position, or, should the unthinkable happen, pay death benefits to a surviving spouse.
Many states shelter employers from lawsuits related to workplace injury as long as their workers compensation policy provides adequate coverage (providing, of course, there are no extenuating circumstances), which means a good workers compensation could save you and your business from time consuming and costly litigation.
Who Needs Workers Compensation Insurance?
Most states require employers to hold workers compensation insurance if they have even one full-time employee—with exceptions for a few industries and occupations. There is good reason for this: Expenses from an on-the-job injury add up fast and have the potential to leave employers scraping the bottom of the barrel for funds and injured employees unsure of where to turn in order to meet their basic needs. If you have even one full-time employee (and in some states, one part-time employee) workers compensation coverage will protect you from liability, help take care of your employees in their hour of need, and satisfy the legal requirements of the state in which you do business.
How much will it cost?
State mandates play a big roll in determining how much workers compensation insurance you need to buy, but one thing is consistent across the country: along with factors determined by state governments, workers compensation premiums are calculated based on a given employer’s payroll expense, a “class rate” based on the risk associated with your industry, and number called an experience modifier.
Your experience modifier is an indicator of the losses that your insurer has sustained from providing coverage to your business. When your carrier pays on a claim, your experience modifier goes up—along with your premiums. Maintaining a safe work environment can go a long way to keeping your experience modifier low and saving you money in the long run.
How do I purchase workers compensation insurance?
Because each state sets its own requirements for workers compensation insurance, making sure you are purchasing the right policy can take some work. An independent insurance agent will be well versed in the requirements of your state and can help make sure you have coverage that you and your employees deserve.