Workers' compensation insurance
Workers' compensation insurance, sometimes called workers comp, protects a business owner from claims by employees who experience a work-related injury or illness – either sustained on business premises or due to business operations. In all states, most companies are required to carry workers’ compensation insurance for their employees. You will need a separate workers' compensation policy for this type of coverage. Each state has an agency that provides information and guidance about the required workers compensation coverage required in the state. The federal government has its own system for providing Workers’ Comp to federal employees.
What workers' comp covers
Typically, workers' compensation insurance covers the employee's medical expenses, rehabilitation costs and lost wages. If an employer does not have workers' compensation and one of its employees is injured on the job, the business may be liable for any medical expenses that individual incurs. The business owner might also face fines and penalties for noncompliance.
Some workers are not eligible for workers' compensation coverage provided by an employer. These include business owners, independent contractors, domestic employees in private homes, farm workers and unpaid volunteers.
Workers compensation rates
Insurance rates for workers compensation insurance are based on the relative risks for work-related injury or illness in a specific industry or, if the company has been in operation for long, on the history of claims by the company. The first time a company purchases workers' compensation insurance, the rate will depend on the amount of the company's payroll and its industry. After a few years, the premiums may be based on the actual experience of the company.
Tips & Considerations Concerning Workers' Compensation Insurance
- Take steps to minimize risk in the workplace, thereby lowering the chances of a worker getting injured.
- If you own machinery, and it is operated by your employees, you are exposed to the risk of serious injuries. Always provide goggles, gloves and other recommended safety gear to help prevent accidents.
- Keep office space in good physical condition. Maintain carpeting and railing on stairs. Make sure telephone and computer wiring is in good working condition and does not create any hazards.
- Workers' Comp rates can be controlled when a work-related accident does happen by implementing a Return to Work program or Kept on Salary measures.
- Business.gov Links to federal government resources and information about workers compensation insurance.
- Workers' Compensation, Safety, and Return to Work Blog Blog covering Workers' Compensation, return to work, and safety topics.