Workers' Compensation Overview
One of the most important keys to your business' success is providing a safe working environment for employees. Unfortunately, sometimes even the best safety precautions can’t prevent an accident or injury. That is why having workers’ compensation (WC) insurance is important to your business.
An accident while driving (for business purposes) on the roadway is one of the top causes of injury. The U.S. Bureau of Labor Statistics reports the transportation industry has more on-the-job injuries and illnesses than the construction, mining, and manufacturing industries.
Additionally, the workers’ compensation environment is growing increasingly complex and challenging as new issues continue to arise. Prescription drugs, marijuana legalization, an aging workforce, and a stream of legal and regulatory changes are all contributing to more complex workers’ compensation claims and higher costs.
Tell me about workers’ compensation.
As a business owner, you need to have a policy in place before hiring that first employee. Most states require employers to cover any full-time or part-time employees. Coverage requirements are set by each state. Failure to carry this insurance or otherwise meet state regulations can leave an employer exposed not only to paying these benefits out of pocket, but also to paying penalties levied by the state.
How workers' compensation helps my business.
Workers' compensation not only offers valuable coverage for employees who are injured on the job or while performing work-related duties, it also protects your business! Workers' compensation can:
- Pay for medical expenses.
- Provide a portion of lost income.
- Protect you from lawsuits filed by employees injured on the job.
What does it cover?
Workers' compensation can cover:
- Injuries employees may suffer while working on your business' premises: For example, slipping on a wet floor and breaking an arm.
- Injuries suffered anywhere else while your employee is working: For example, traveling on business or running a work-related errand.
- Certain illnesses and occupational diseases contracted as a result of employment: For example, developing a lung disease caused by chemical exposures while on the job.
- Problems and illnesses that are developed over a long period of time of doing the same activity: For example, carpal tunnel syndrome or back problems from some sort of repetitious movement.
How are premiums set?
Workers’ compensation insurance premiums are calculated based on your industry classification code and payroll. Currently, there are more than 700 codes as designated by the National Council on Compensation Insurance (NCCI). Each one denotes a specific type of work. The riskier a profession, the more it costs to buy workers' compensation for an employee in that profession.