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 What
is workers' compensation insurance? This
insurance pays benefits to your employees if they are injured while
on the job. Specifically, it covers their medical bills, a portion
of lost wages, vocational rehabilitation and death benefits. Almost
every state requires by law that employers carry some form of workers'
compensation insurance. Because the coverage amount is established
by state law, benefits do not vary from company to company within
the same state.
What does workers' compensation cover?
Benefits paid to employees generally include:
- Unlimited reimbursement of medical expenses
- A portion of lost wages
- Some vocational rehabilitation
- Survivors death benefits
Benefits paid to the employer generally include:
- Responses to lawsuits brought by injured
employees or their dependents for grossly negligent acts by the
employer
- Protection against employee claims for pain
and suffering and loss of relationship (except in North Dakota,
Nevada, Washington, West Virginia, Wyoming and Ohio)
Who does workers' compensation cover?
Workers' compensation covers all the employees
of the small business. Special provisions must be made if employees
work out-of-state. It can cover the business owner if the business
is a corporation, and the owner is actively involved in the business.
It does not cover independent contractors.
How does workers' compensation work?
When a worker suffers an injury, even a minor
one, it is immediately reported to the workers' compensation insurance
carrier. The employee seeks necessary medical attention, and the
insurance company pays the bills. If the employee misses work because
of the injury, the insurance company pays the employee limited benefits
for the lost time. If the employee is not able to return to the
job due to a permanent injury, the insurer pays to re-train the
employee for another line of work. If the employee dies, the insurer
pays a death benefit to the employee's family.
Why do I need workers' compensation?
Most states require by law that employers provide
workers' compensation benefits. Only businesses that pass strict
financial tests by the state can consider "self-insuring." Even
if approved, special measures usually must be taken to comply with
the various state laws. Failure to carry it exposes the employer
to paying what the insurer would have paid, plus severe fines, and
possibly even jail time for violating the law. The benefits can
amount to hundreds of thousands of dollars. The employer has a legal
duty to make sure employees get the legally mandated benefits without
delay.
What affects my rates?
- Size of payroll
Workers' compensation premiums are based
directly on the amount of your payroll. The higher your payroll,
the more in workers' compensation premiums you will pay.
- Job classifications
The cost of workers' compensation insurance
also varies widely depending on the work function of an employee.
In general, a premium for an employee who is a roofer is much
higher than a premium for a clerical worker. Employers must
accurately report payroll by classification of work performed.
Your insurance company can advise you which classes apply to
your employees.
How do you get the best policy at the
best rate?
Request a quote or contact
us.
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