If you’re an employer, workers' compensation insurance is required by law to cover your employees in case they are injured or sick while on the job. All states require businesses to have some sort of coverage, though the extent of the benefits provided may vary depending on your location or industry. Because each state has different policies, as a business owner you should investigate your requirements so that you are providing your employees with an adequate amount of coverage.
What Is Covered
Most commonly, worker’s compensation insurance covers all types of pain or suffering caused while on the job. The amount of payment or wage replacement the worker receives is based on the severity of the injury as well as their ability to find new or temporary employment while in partial capacity. According to the Bureau of Labor Statistics, nearly 3 million nonfatal workplace injuries and illnesses were reported by private industry employers in 2011.
- Reimbursement or payment of medical expenses, or a type of health insurance may be included.
- A provision made in place of weekly wages, or a form of disability insurance may be included.
- Benefits payable to the family of workers killed on the job, or a type of life insurance may be included.
- Compensation for past and future economic loss may also be offered.
Whether you’re covered or not, consider hiring a workplace safety professional to assess high risk areas.
Some states require you to buy your worker’s comp coverage through state-operated funds, while others will allow you to buy from independent insurance companies. Worker’s comp rates are rising faster than any other insurance coverage, but there are ways to keep your costs down while still getting the coverage you need.
- Shop around and get quotes from multiple providers to find the best coverage plan for your company.
- Consider bringing in an outside firm to audit your coverage to find you more savings.
- Focus on safety training and accident prevention to keep premiums down.
Implement Workplace Safety Procedures
When it comes to cutting back on worker's compensation costs, prevention really is the best medicine. By establishing safety training programs and keeping your workplace up to date with regulations, you can reduce both your premium amount and your risk level.
- Investigate any uninsured contractors that you might be responsible for, and check your workers for possible “good behavior” discounts.
- Equip your workspace with the latest safety technology to also cut down premiums.
- Use the extensive workplace safety checklist from Nonprofit Risk Management Center. Contact the Occupational Safety & Health Administration (OSHA) and the National Institute for Occupational Safety and Health (NIOSH) to find information about particular workplace issues (for example: hazardous substances that your employees regularly come in contact with or health issues that commonly affect your industry).
Though the definition of “work-related injury” tends to fluctuate between states, some type of worker’s compensation coverage is required throughout the US. Be sure you understand the requirements of your area, and invest in a policy that will give your employees the right type of coverage. Be sure not to cut corners simply to get the best deal, as paying off a big lawsuit could be devastating to any business.