Does your business have to have Workers' Compensation insurance? In most cases, if you have any employees, the answer is yes. In the United States, unless you're in Texas, employers need workers compensation insurance. It's required in every other state and covers your employees' medical expenses and lost wages if they're hurt on the job.
Workers' Compensation is designed to ensure that employees who are injured or disabled on the job are provided with fixed monetary awards, eliminating the need for litigation. Workers' Compensation insurance protects employers from claims resulting from injuries to employees. It protects your business from lawsuits and provides employees with compensation for on-the-job injuries.
How Much Coverage?
Each state mandates how much coverage you, the employer, must buy, and what percentage of the employee's salary you'll pay if he or she misses work due to a work-related injury.
Purchasing Workers Compensation Insurance
When it comes to purchasing worker's compensation insurance, your options are limited by the state in which you live and the national rates that affect your premiums.
Because requirements are clearly defined by each state, workers compensation insurance packages themselves are fairly standardized, with little variation among different companies' basic policies. Basic workers compensation coverage includes medical treatment, rehabilitation costs, and lost-wage replacement, covering up to two-thirds of an employee's regular salary while he or she is out of work. Most workers compensation policies also include liability coverage, which applies if a worker's family sues the employer for damages stemming from a workers compensation claim.
Choosing a Workers Compensation Insurance Agent
Consider the following factors when selecting an agent or broker to help you obtain workers compensation insurance quotes for your business:
- You should use an agent who is familiar with your industry and knows which insurance companies are the best fit.
- A good agency will uncover discounts for you, and will advocate for you during the premium-negotiation process.
- Ask about an insurer's response time in handling claims.
- A good agency will provide you with the resources to begin a program to help you save money on payments by establishing loss-control programs for your business.
- Ask about the agent's ability to write out-of-state policies. You'll need them if you have a mobile or multi-state workforce.
- Agencies should be vigilant about accurate claims reporting to the National Council on Compensation Insurance, since inaccurate claim reports affect your premium for three years.
Failure to carry Workers Compensation Insurance
Failure to carry it exposes the employer to pay what the insurer would have paid, plus severe fines, and possibly jail time for violating the law. The benefits may amount to hundreds of thousands of dollars. The employer has a legal duty to ensure that employees get the legally mandated benefits without delay.
