Workers Compensation Insurance
Workers’ Compensation Insurance is probably the most misunderstood insurance product but one of the most important means of protection for any business owner with employees. Since workers’ compensation is regulated by the state in which you operate, the rules and regulations can vary across the country which is all the more reason why an experienced agent or broker should be consulted prior to purchasing.
This insurance policy was designed to protect workers who suffer work related injuries or illnesses while on the job. It is designed to pay for healthcare costs, loss of income and provide a burial benefit. Although most states differ on rates and required coverage, the overall protection provided by the policy is the same throughout the country. Workers’ Compensation will provide coverage for :
- Costs relating to medical care to treat a work related injury
- A portion of lost wages as a result of a work related injury or illness
- Survivor benefits for the family of an employee who is killed as a result of their job
- Offers coverage for a portion of the cost of burial of an employee due to a job related death
Since rates and requirements are set by each individual state, the business owner should check with an experienced agent/broker in their state to determine 1. If they are required to provide workers’ comp and 2. Who in the organization must be covered. For example, the state of Georgia requires workers’ compensation coverage for any business that has 3 or more employees and will allow the company to exclude company officers from coverage, in Florida the trigger is 4 or more and in Alabama the trigger is 5 or more.
Pricing
Workers’ compensation pricing is based on the classification (job description) of each employee. For example, a drywall contractor is going to pay more than an accounting firm due to the nature and historical injuries reported by that industry. Each industry classification is assigned a rate per $100 of payroll. As a result of this, the agent working your proposal will need to know what each employee does and how much they typically earn in a 12 month period. The insurance company providing the policy will also Audit your policy on a regular basis to allow for changes in number of employees and their payroll amount.
The typical business owner may dread addressing the cost of workers’ compensation insurance but should understand the two major benefits having this policy :
- Employees are protected in the event of a work related injury or illness.
- The employer is protected from a liability lawsuit by an effected employee because of the Workers’ Compensation Coverage.
Rather than purchase a policy based solely on price, protect your business and your investment by contacting us so that we can help you navigate the coverage and requirements and allow you to make an informed decision about this valuable protection.