What Is Workers Compensation?
Workers compensation provides wages and medical care costs for people who are injured on the job. Employers pay for workers comp coverage, and employees don’t contribute to the fund.
A workers compensation is paid if the employer or insurance company confirms that the injury or illness was work-related. If the insurer or employer rejects the workers comp claim, a workers compensation judge decides on the case.
In addition to paying for injuries and rehabilitation, workers compensation may compensate a family after a work-related death.
What Does Workers Comp Insurance Cover?
Here’s a brief look at the benefits that are covered by Workers Compensation Insurance:
Medical expenses including hospital visits, medications and emergency surgeries are all covered by workers compensation.
- Lost wages are partially covered when the employee needs time away from work to recover from a work-related illness or injury.
- Disability benefits are available if the injury caused a partial or permanent disability.
- Ongoing care costs, such as physical therapy, are covered by workers compensation.
- Death benefits typically include funeral costs and survivor benefits for the worker’s family.
Workers comp benefits are paid no matter who was at fault. And workers compensation laws typically prevent employees from suing their employers for a work-related injury or illness.
What Does Workers Compensation Insurance Not Cover?
Employees are covered for workers compensation regardless of the number of hours they work.
However, there are exclusions, which could result in a denied workers comp claim, including:
- Commuting: Traveling to and from work is typically excluded from workers comp coverage. A person may be covered if they’re in a company vehicle or don’t have a physical office, such as a traveling salesperson.
- Intoxication or substance abuse: Many states exclude workers compensation coverage if the injured person was intoxicated and that contributed to the injury.
- Workplace fight: If an injury happens during a fight with a colleague, workers compensation may not cover the injuries. One exception is if the fight was about work.
Where to Buy Workers Compensation Insurance
Need to buy workers compensation insurance for your employees? You’ve got different options depending on your state: You might buy workers comp from private insurance companies or purchase it from a state-run agency—or you might have both options.
Private workers compensation insurance companies set their own prices and approve or reject customers. You may get a better price from a private insurer than from a state fund.
If you are not able to purchase the workers compensation coverage that you want from a private insurer, you may want to check out a state-funded program.
In a competitive, state-funded workers comp program, private insurers and state-funded programs compete for customers.
In monolithic, state-funded workers comp programs, businesses have no choice but to get workers compensation coverage from a state-funded program. Ohio, North Dakota, Washington and Wyoming are examples of states with monolithic state-funded programs for workers compensation.
How Much Does Workers Compensation Cost?
Workers Compensation premiums are based on the job classifications of employees and these classifications reflect the riskiness of the job. For example, a construction worker or electrician would be considered high-risk jobs. Other high-risk jobs include police officers, firefighters, lumberjacks and telecommunications repair workers.
The payroll of the business and any past workers comp claims also impact workers compensation premiums.
Workers Compensation insurance costs an average of $1 for every $100 in payroll, according to The Hartford. This average varies considerably by state.
“If there is confusion about workers comp, it’s usually around how the premium is determined in part by the number of employees on the payroll,” says Andrew Dalton, assistant vice president for The Hartford’s small commercial workers compensation line of business. “Each year, state law typically requires every workers comp insurance company to perform an audit of the premium paid.”
“It’s important to keep in mind that this audit is required and it’s important to be certain that the business owner is accounting for their employees throughout the year,” Dalton says.
The audit looks at the past year’s payroll for the business and determines whether premiums were over- or under-collected, or just right. It also determines what the next year’s premium should be. This audit can result in the business owner getting a refund or credit or owing more on their workers comp premium.
Risk Control for Workers Comp Claims
By working to control your business’s risk of workers comp claims, you can keep control of future premiums. Training employees on workplace safety is a key approach to minimizing worker injuries and accidents. Many states offer workers compensation insurance discounts if the business implements a workplace safety program. Morning Star Insurance has a free safety program available to our clients that will help you do just that!
In conclusion, the best way to be certain you’ve got the right insurance for your business, including workers comp, is to speak with one of our licensed & experienced agents here at Morning Star Insurance. Give us a call toll-free at 1-866-546-5598- we have many Carriers that we work with and we’ll be able to find the best and most cost-effective coverage for your business!