Workers’ Compensation insurance provides coverage for employees who become injured or ill on the job.
A Workers’ Compensation policy will:
Almost every state requires Workers’ Compensation Insurance, however there are some exemptions, check with your state to understand mandatory coverage rules.
For example, if your insurance is compliant with state law, an employee who receives benefits can’t sue you for their injuries or lost wages.
Employers that choose not offer Workers Compensation bear a significant financial risk, chance of a lawsuit, and responsibility for an employee’s injury or death while on the job. There’s no match for the comprehensive benefits of a Workers’ Compensation policy. Some nonsubscribers try to protect against risk with a patchwork of disability, occupational accident, or other alternate coverage. General liability and other policies are limited, and can end up costing more than workers’ comp. In fact, it could cost you your whole business.
Workers’ Compensation Insurance protects businesses, motivates safer working conditions, and helps injured workers return to productive employment.
Most states require employers to carry Workers’ Compensation coverage if they have employees. Laws vary by state and can include exclusions for certain types of employees. For example, workers classified as federal employees get coverage through a program administered by the Department of Labor.
The cost of Workers’ Comp Insurance varies between businesses. Factors that insurance companies take into consideration when determining premiums, can include:
A formula that may help you estimate Workers’ Compensation Insurance premiums is:
Average Annual Cost for a small business with less than $300,000 in payroll was about $850.
*This is simplified and for educational purposes only
While no one expects a workplace injury to happen, they can and do — in every industry and in many different types of roles. Workers’ Compensation is good for both employers and workers because it protects both parties. It’s the only insurance that provides both medical and disability coverage for workers as well as legal protection for employers.
