Accidents are bound to happen at work, which will lead to injuries. Workers’ compensation offers financial protection to employers and employees from injuries sustained at work.
This article will serve as a guide for business owners looking to buy worker’s compensation insurance.
We will discuss how states regulate worker’s compensation insurance, what you need to apply for it, and the benefits of doing so. Continue reading the article below to learn more.
What is Worker’s Compensation?
Worker’s compensation is insurance that provides medical assistance to employees who were hurt while on the job. The employers pay the cost of worker’s compensation.
Additionally, worker’s compensation applies cash benefits to reimburse employees who lost wages if they were to be too hurt to work.
Understanding State Laws Regarding Worker’s Compensation
Workers’ compensation is typically regulated by the state the employer operates in. While some universal principles apply nationally, each state has its differences, and it’s important to understand what your state requires of you. Some states cover mental health regarding workers’ compensation, while others focus only on physical injuries. Some states allow companies to perform check-ins with disabled employees to check their ability status, while others deem it a violation of employees’ rights. Understanding the differences can determine what insurance coverage works for your business.
Texas is the only state that doesn’t require businesses to carry worker’s compensation insurance.
How To Get Worker’s Compensation
The first step is to contact a reputable worker’s compensation insurance company. Additionally, some states have government-funded programs you can apply for. You will need certain company information on hand when applying for an insurance quote, such as:
- Company Name
- Federal Employer Identification Number
- Number of Employees
What Determines The Cost of Your Premiums
The main factors that determine the cost of your premiums are:
Location: State regulations of worker’s compensation play a major role in your monthly premiums.
Payroll: A worker’s compensation insurance company factors the number of employees on your payroll and how much cash is flowing through your business. It’s important to accurately state your payroll because any discrepancies will be found in an end-of-year audit, and you could be faced with a large unexpected bill.
Claims History: Like any insurance, your previous history plays a significant part in determining your premium. Suppose your company has a long history of employees getting hurt on the job that you can expect to pay a higher premium.
Benefits of Worker’s Compensation
For employers having worker’s compensation insurance prevents you from employee lawsuits regarding injuries sustained at work. For employees, they receive financial assurance that their medical bills will be covered in case of a workplace accident, which has been shown to boost company morale.
Worker’s Compensation Insurance Protects Everyone
There’s a reason almost every state legally requires companies to have worker’s compensation insurance; it helps everyone. It ensures employees don’t have to pay medical bills out of pocket, which can drive them to bankruptcy, and it prevents employers from facing massive lawsuits, which can also drive them to bankruptcy.