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Workers Compensation Insurance

When employees sustain work-related injuries, employers are typically responsible for their medical costs and lost wages. This policy covers these expenses, protecting employees while simultaneously keeping companies running smoothly.

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Who is Workers Compensation Insurance for?

Most states — except for Texas — require employers to obtain this coverage. Noncompliance could result in jail time, hefty penalties and fees, and stop-work orders. Strangely enough, employers can purchase workers’ compensation insurance in various ways; however, buying it from private insurers is the most popular choice.

Companies with employees

Employers with one or more employees are typically required to purchase workers compensation insurance.

Companies hiring contractors

Depending on the area, many states require companies to purchase workers compensation insurance for hired contractors.

Companies engaging trainees

Companies who engage trainees as well as part-time, seasonal, and temporary employees usually need workers compensation insurance.

Why you need Workers Compensation Insurance

Summary

Employees sometimes get injured on the job, leaving them unable to work for a prolonged time frame. In these situations, employers are typically held responsible for their medical expenses and lost income. Workers’ compensation insurance responds to cover these particular costs. This policy ensures owners don’t have to dip into the business savings or face legal ramifications from employee lawsuits.

Reasons for getting Workers Compensation Insurance
file copyright tm Covers employees medical costs lost wages
shield check Most states require this coverage
legal Protects employees if they’re hurt on the job
Annual workplace injuries
7m

Every day, employees sustain 12,900 work injuries, which adds up to 7 million work injuries each year. Not only is this number astronomical, but the financial damages are, too.

Most common injuries
3

The three most common workplace injuries show how effortless it is for employees to get hurt. These injuries include:

  1. Sprains, strains, and tears
  2. Soreness or pain
  3. Cuts or punctures
Direct financial loss
$170b

Over 150,000 employees sustain work-related injuries, causing lost wages and time. These workplace injuries add up to more than $170 billion in direct financial loss.

What Does Workers Compensation Insurance Cover

You will have to consult your policy documents to confirm exactly what coverage your insurance provides but here are  some examples of what is covered by directors and officers insurance:

Medical expenses

If an employee is hurt on the job, this policy responds by covering for any related medical costs.

Lost wages

When employees can’t work due to workplace injuries, this policy compensates for lost wages.

Disability benefits

Suppose an employee suffers a disability because of a work-related injury, this policy provides a portion of ongoing lost wages for that time frame.

Death benefits

If a work-related injury causes an employee’s death, the spouse, minor children, or other dependents receive a death benefit payout.

Rehabilitation

Some states provide vocational and/or psychological rehabilitation for employees who’ve experienced work-related injuries.

Workers Compensation Insurance FAQs

While each state sets workers’ compensation requirements, three types of states exist that influence premium cost:

  • NCCI states use codes and rates the National Council on Compensation Insurance (NCCI) establishes.
  • Independent bureau states develop their own separate rating bureau.
  • Monopolistic states prohibit private insurance coverage, but instead, use a state fund to provide workers’ compensation insurance.

Additionally, local laws and regulations create higher rates too, mostly because of the number of high-risk jobs in the area. For example, New York doubled the claim payout in the last few years, undoubtedly impacting its workers’ compensation rate.

Of the 50 states, 38 of them have rates lower than $2 per $100 in employee wages. The lowest rate is in North Dakota, coming in at $0.82. Following closely behind are Indiana, Arkansas, West Virginia, and Utah. Conversely, New York has the highest rate of $3.08, trailed by California, New Jersey, Alaska, and Delaware.

Premium amounts for workers compensation insurance typically vary from business to business. But calculating workers’ compensation insurance is exceptionally unique because it depends heavily on the state. Although classification codes are standardized throughout the US, workers’ compensation rates are established by each state.

The basic estimation is:

 Premium = (Payroll/$100) x Class Code Rate x Experience Modification Rate

For example, at a workers’ compensation rate of $1.35, a business with $100,000 in payroll can expect to pay around $1,350 in annual premiums. However only an exact quote from an insurance carrier will grant you a final figure

While each state mandates specific coverage, the following are a handful of events NOT covered by a typical workers’ compensation policy:

  • Injuries sustained outside the scope of employment, such as when you’re commuting to work or out to lunch at a local cafe
  • Cumulative trauma injuries, such as carpal tunnel
  • Mental health conditions, such as post-traumatic stress disorder (PTSD)

How it works

Finding insurance coverage doesn’t have to be painful. We aim to make the purchasing experience as streamlined & intuitive as possible.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

1
Get a quote

Use our custom built online portal to get quotes fast. We automate clerical tasks that plague the traditional insurance brokerages, giving us more time to be responsive and alert to your company’s needs.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

2
Pair with a specialist

No two organizations are the same. Our team of coverage experts partners with your team to engineer your risk management strategy, together. We take the time to understand the intricacies of your company to get you the best possible coverage.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

3
Stay one step ahead

To do better, you need to know better. With changing political, technological, legal and economic landscapes, staying ahead of the curve is critical.

Our in-house team is tapped into the latest developments of your industry, proactively ensuring you’re covered.

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