What Is Workers Compensation - Insure My Work Comp

Workers Compensation:

Protecting Your Employees & Your Business

What You Need to Know
About Workers Comp Insurance

What is Workers Comp Insurance?

Workers Compensation insurance, also known as Workman’s Comp and Work Comp, is mandatory in the majority of states. Employers purchase a Workers Comp policy to provide employees with coverage for medical expenses and rehabilitation costs in the event of on-the-job injuries or illnesses. If an employee misses work because of a job-related injury or illness, Workers’ Comp can also provide partial lost wages. In most situations, injured employees receive coverage no matter who was at fault for the injury, and preclude workers from suing employers for the injuries covered.

Bottom line: Workers Comp insurance protects your business’ assets by shielding you from potential lawsuits, while providing injured employees with medical care and compensation for lost wages.

Who’s Covered?

Each state establishes its own parameters about when an employer must acquire Workers Comp coverage. Some states have a rule regarding the minimum number of employees that an employer has to have in order to be required to purchase Workers Compensation insurance. Other states require Workers Compensation if the employer has any employees at all. States may also exclude certain industries from coverage.

Additionally, all states have different Workers Comp requirements regarding independent contractors, out-of-state employees, and part-time workers. Most levy a fine when a business does not have the required coverage. It’s important to understand the requirements in the states in which you operate so that your business is in compliance. The insurance agents at Insure My Work Comp are well versed not only in each state’s requirements but also for each industry.

What’s Covered?

Workers Comp insurance generally covers the following:

Medical expenses – to treat job-related injuries and diseases. This incudes ER visits, ambulance rides, doctor visits, prescriptions, and other medical bills.
Lost wages – typically pays two-thirds of the worker’s average income up to a fixed maximum amount if an employee cannot return to work because of his/her injury.
Ongoing care – including surgery, rehabilitation, treatment from specialists, etc. Even if an injured employee is unable to return to work, your business may be responsible for the cost of their care.
Funeral costs & death benefits – if an employee is killed while performing a job-related duty, some policies will cover funeral expenses and provide support payments to the employee’s beneficiaries.

Workers Comp also covers problems and illnesses that are developed over a long period of time of doing the same injurious activity; for example, carpal tunnel syndrome or back problems as a result of repetitious movement.

What’s Not Covered?

Workers Compensation covers injuries and illnesses that are within the “course and scope of your employment.” The range of injuries and situations covered is broad, but there are limits. States can impose drug and alcohol testing on the injured employee, and can deny the employee Workers Compensation benefits if such tests show the employee was under the influence at the time of the injury. Compensation may also be denied for: self-inflicted injuries; if an employee was violating a law or company policy; and where the employee was not on the job at the time of the injury.

How Can I Reduce My Workers Compensation Costs?

There are several measures your business can take to reduce the cost of Workers Comp insurance, including:

Understanding how your premium is calculated. – Included in the calculation is a numeric representation of your company’s loss history compared to the average for your industry. If your loss history is worse than the average, your “experience modification rate” will be higher which negatively impacts your premium. If this is the case, look into the factors behind what’s driving your worse-than-average loss history and take steps to improve your rate with a more robust safety program.

Enhancing your safety program by fostering a culture of safety throughout your organization; implementing rigorous safety procedures and protocols; and mandating employee safety training.

Implementing an active claims management program to pinpoint frequent causes of injuries, how quickly accidents are reported and injuries treated, and other important factors that impact the cost of a claim.

Putting into a place a return to work program to get injured employees back to the workplace as soon as they are medically able.

Performing pre-employment testing and vetting comprised of employee background checks including reference and motor vehicle record checks, physicals or physical agility tests per job description, and pre-employment drug tests.