Workman’s comp is a crucial aspect of any business that employs workers. It is designed to protect both businesses and their employees from the financial implications of workplace injuries, lost wages, and can also include payments for permanent disabilities and to dependents of workers who lose their lives in job-related accidents.
From small businesses to large corporations, any organization employing full-time, part-time, or temporary workers may require workmans comp coverage. Albeit, the latter will depend on local state laws.
Read on to learn more about the what, why, and how of workmans comp so you can understand this essential insurance policy thoroughly.
Workers’ Compensation Coverage: What’s Included and What’s Not
Workers’ compensation insurance typically covers costs related to:
- Medical bills for treating the injury or illness.
- Rehabilitation services required for recovery.
- Lost wages during the recovery period.
- Disability benefits if the employee is unable to return to work.
- Death benefits and funeral expenses in the unfortunate event of a fatal workplace accident.
However, there are specific circumstances that workers’ comp insurance does not cover. These include injuries resulting from fights initiated by the employee, injuries sustained while the employee was intoxicated or intentionally trying to hurt themselves or others, and emotional injuries without an accompanying physical injury.
Why Is Workers’ Compensation Necessary?
Protecting Employees
Workmans comp assures employees of financial support in the event of a work-related injury. This coverage extends to medical bills and lost wages, ensuring that employees can focus on their recovery without worrying about financial difficulties.
Protecting Employers
In addition to benefiting employees, workers’ compensation also protects employers. In the event of an employee injury, this coverage prevents the employer from bearing the medical costs and potential legal fees out of pocket. Workplace accidents can lead to substantial medical expenses and compensation costs, significantly impacting a business’s finances.
By having workers’ comp coverage, businesses can effectively manage these unexpected costs without straining their resources. Plus, employees will be more motivated to do their jobs since they’ll be secured in the event of something unfortunate, leading to higher business productivity.
Furthermore, it’s a legal requirement in almost all states, failure to which can result in hefty fines and penalties.
Moreover, the insurance shields businesses from lawsuits brought about by injured employees. In return for the guaranteed benefits provided by workers’ comp, employees usually forfeit their right to sue their employers for damages related to the injury or illness.
How to Get Workers’ Compensation Insurance
Workers’ compensation insurance can be purchased separately from your general business insurance policy. The process and offerings might differ based on the state regulations and the insurance provider.
Identifying the Right Provider
When selecting a provider for workers’ compensation insurance, choosing a company specializing in this field is crucial. The provider should have a deep understanding of the complexities involved in workers’ compensation and be able to navigate these complexities effectively.
Engaging with Independent Insurance Agents
While you can directly purchase workers’ compensation insurance, many business owners find it beneficial to work with independent insurance agents. These agents can compare services and prices from various carriers and recommend the package that best suits your needs.
In Summary: Saving on Workers’ Compensation Premium
There are several strategies to control your workmans comp premium. By maintaining a safe workplace, quickly reporting claims, and providing light-duty work to injured employees with medical restrictions, you can significantly reduce your claim costs and, consequently, your premium.