Whether you have three employees or several thousand employees, it only takes one injury to interrupt your daily processes. As a business owner, you most likely are concerned with protecting your employee from injury as well as meeting workers compensation requirements in your state and ensuring that your business runs as usual. Getting the right workers comp in place for your business can help you meet all of those goals.
If you need to find workers compensation insurance, review your options with a knowledgeable insurance agent. An independent agent specializing in business insurance can help you compare insurance providers and find the right workers comp coverage for your business.
Workers Compensation Insurance Facts
When you begin to think about what kind of coverage you need for your employees, consider these facts about workers compensation:
- Workers comp, originally known as “workman’s compensation,” has been available in all states in the U.S. since 1949, although it is not required in every state.
- Most states require this insurance under workers compensation laws; it is sometimes required for every business, but some states only require workers compensation insurance if the company has three or more employees.
- Workers compensation and long or short term disability are not the same things. Long and short term disability can be purchased privately or may be part of an employer benefit package.
- If workers comp is required by your state, you can deduct your workers compensation premiums from your taxes.
- Workers compensation forms and information should be posted in an easy to see public space for employees to read.
What Is Workers Compensation Insurance?
Developed close to 100 years ago, workers compensation is a form of occupational injury insurance that business owners can buy to protect workers from costly medical expenses from injury or illness while on the job. It also protects your company from employee lawsuits. If an employee is injured while at work, your workers compensation insurance can pay for the employee’s injuries and/or illnesses. Each state has its own laws that determine if coverage is required and how much you should buy.
Some states, like Texas, do not require every employer to have workers compensation insurance, although it is required in some industries such as construction. Other states, like California, require every business to have insurance. For other states, the number of employees you have as well as the size of your business will determine what kind of workers compensation insurance policy you need to purchase. Be sure to check your state regulations to make sure you are in compliance, or contact an independent agent in your local area.
How Much Does Workers Compensation Cost?
Similar to any insurance policy, workers comp rates will vary depending on the unique characteristics of your business. Typically, a small business owner with a few employees can expect to pay $2,000 to $3,000 for workers comp coverage annually. If a business owner has 20 employees, premiums can cost up to $12,000 per year on average. Each state has specific rate structures and classification systems to develop workers compensation insurance quotes.
Other factors used to determine workers comp rates include employee pay and occupational hazard. For every $100 of an employee’s salary, a specific cost is assigned to that individual. If that employee is working a particularly dangerous job, the cost of the policy will typically be higher. Discounts are available for businesses that initiate a work safety program, have a drug free workplace, and apply a high deductible to the workers compensation insurance policy.
What Does Workers Compensation Cover?
Workers compensation insurance will cover any employee on the policy for injuries on the job or an illness develops due to the job. While workers compensation typically pays the costs involved in an employee’s injury or illness, coverage may be denied under any of the following exceptions:
- Self-inflicted injuries
- Injuries that occurred while an employee was committing a crime
- Injuries incurred while an employee wasn’t on the job
- Injuries that occurred as a result of an employee’s conduct that violates company policy
If workers compensation claims are valid, benefits will pay for medical expenses and lost wages. Workers comp can also provide coverage for rehabilitation services and retraining programs but that will depend on the employer. If an employee is killed while on the job, workers compensation can provide benefits to dependents of the employee.
Filing a Workers Compensation Claim
If someone is injured while on the job, file the claim immediately. Waiting to file a claim is not recommended and could lead to denial of benefits. Most states have a 30 to 90 day time limit, although for some states you hae a year or more to file a claim.
The first thing an employee will do to file a claim is notification of injury or illness to the employer. This can be done two ways:
- The employee can notify the employer and at that point, the employer needs to file a report and make a claim.
- If a doctor determines an injury or illness is work-related, the employee will then fill out workers compensation forms. This notifies the employer and insurance company.
Regardless of the circumstances that led to the illness or injury, the filed claim should be very specific. Include the date and time of the injury or cause of illness, if known, and how the incident happened. If witnesses are available, provide names and contact information. The insurance company will review the claim and provide benefits to the injured employee.
For illnesses and injuries that developed over time, filing a claim can be more difficult. Therefore, providing complete documentation is especially critical.
How to Buy Workers Compensation Insurance
Finding the right workers compensation insurance is essential to protecting your business and your employees. As a business owner, if you don’t have time to do thorough research, contact a local independent agent who can help you get the specific workers compensation coverage you need to protect your company’s financial wellbeing. Because independent agents work with multiple workers compensation carriers, your agent can compare prices from different companies to find the right fit for your company.