In all probability, workers’ compensation coverage is a necessity if you have an operative business that employs one or more people. But why do you need a workers’ compensation insurance policy and what does it put on the table for your business and your employees?
Well, according to the Bureau of Labor Statistics, 2.1 million workers in the private sector sustained workplace injuries in 2020. As a result, workers’ comp insurance is required to provide cash benefits and medical care for employees who get injured or become ill as a direct result of their job.
Unfortunately, finding a proper workman’s compensation insurance policy for your company can prove to be challenging, particularly if you’re a small business with only a handful of employees. After all, insurance providers will most certainly not offer you the same incentives and conditions as they would bigger-sized companies and corporations, so it’s essential to know how to navigate yourself through the process so you could find a workers’ comp policy that works best for your company.
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To make things easier for you, in the article below, we’ll go through the 7 most important things you should know to find and choose the best workers’ compensation insurance package for your business and employees.
Understand What Your State Requires
Because the laws governing workers’ compensation vary from state to state, first of all, you should make sure you are knowledgeable about the regulations that are relevant to your company in each place your company operates.
For example, if your employees are spread across more than just one state, or if you’re thinking about building a presence in another country, you should take that into consideration, notify your insurance agent and get a tailored workers’ insurance comp policy that will comply with all state laws.
The universal rule here is that each state has certain requirements for the amount of workers’ compensation insurance that an employer must obtain and the benefits that injured employees are entitled to, so make sure you’re compliant with those requirements.
Locate A Reliable Agent In Your Region
Working with a good insurance broker or agent is essential, as they can instruct you on the ideal procedures to safeguard your company. Find a partner who has experience as an agent and is informed about your sector.
Your agent needs to be aware of the laws governing workers’ compensation in the relevant jurisdiction(s) for your company. Additionally, your agent ought to be able to advise you on how to put in place safety measures that might minimize your insurance costs.
Put Workers In Groups Based On What They Do
Classification codes and a numerical system that standardizes the job that employees accomplish are the basis for workers’ compensation rates. Then, depending in part on the chance of injury or relative risk, a rate is assigned to each class code.
Group current employees on payroll according to the kind of work they undertake if you urgently require workers’ comp. Get into the practice of writing concise descriptions of roles within your company along with grouping employees. An insurance underwriter will find it simpler to appropriately categorize your staff as a result.
Keep in mind that the cost of your workers’ compensation insurance is determined by the risk involved with each group of employees as well as the overall payroll. Because of this, precision is crucial.
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Inquire About Credits And Discounts
Most of the factors used to determine premiums are outside of the control of employers. However, you can reduce prices by finding out about rebates and credits, like:
- Workplace safety programs;
- Formal training programs;
- Owner exceptions;
- Payment plans;
- Payroll reporting.
Make A Safety Plan
To reduce the likelihood of work-related injuries, adopt a safety plan if you don’t already have one and set up strict policies. To significantly lower claims, simple measures like ladder safety, sufficient signage, suitable protective clothing, and regular training can be taken. Some jurisdictions provide premium reductions or credits in exchange for workplace safety initiatives. If reductions or credits are offered in your state, ask your agent about them.
Recognize The Coverage Provided By Workers’ Compensation Insurance
Typically, these insurance policies are split into two halves. Bodily harm sustained by accident while working is covered under workers’ compensation. It also covers physical harm brought on by illnesses that are brought on or made worse by working conditions.
Benefits, such as medical care and disability payments, are typically granted regardless of who was at fault for an accident or injury. Workers’ compensation benefits, however, will typically not be provided when an employee’s injury stems from criminal conduct, drug usage, self-inflicted injuries, or suicide.
Employers are shielded from civil liability by employers’ liability insurance for common law harm claims resulting from or occurring in the course of work. Care and loss of services, resultant bodily harm to an employee’s family member, and other third-party claims are examples of such claims.
Consistently Review Your Policy
Most insurance contracts need to be evaluated each year. It is crucial to check your insurance with your agent and discuss any adjustments to your company’s activities that could have an impact on the coverage and cost.
Changes in the sort of work being done, the locations where your workers perform their jobs, the usage of independent contractors, your overall payroll, or other forms of payment for work could all fall under this category. Depending on the modifications, you could even be able to reduce the cost of your insurance. Talk to your insurance agent or insurer about any adjustments to your company’s operations.
Final Thoughts
Although it is your duty as a business owner to ensure that your employees have a safe place to work, accidents and injuries can still occur. Workers’ compensation insurance is crucial for the safety of your employees and is even mandated by law in the majority of states. Follow the tips above to find the best workers’ compensation insurance for your business.