What is Workers Compensation?
Workers compensation benefits provide coverage for
medical expenses as well as reimbursement for lost
wages when employees are injured on the job.
Workers
compensation coverage includes two types of
protection: workers compensation and employer's
liability. The workers compensation portion of
the
policy pays for claims made by employees, and the
employer's liability portion pays the cost of
defending lawsuits filed against the company by an
employee or an employee's family.
Workers compensation insurance may not be at the
top of your list of things to think about, but it
should at least be on that list for three reasons:
Workers compensation insurance is required by
law in all 50 states.
Workers compensation insurance can protect your
business from lawsuits. Without the right coverage,
an injured worker might sue your business
to recover
medical costs, disability costs and damages.
If you understand how the system works, you can
take advantage of simple ways to reduce workers
compensation costs.
Getting Covered
Each state enacts its own workers compensation
statutes, so you need to check with your state
insurance commissioner's office or your insurance
agent
to find out about rules that govern your
business.
Depending upon where you live, you can buy
coverage through a state-run fund or a private
insurer; some states offer a choice of either. If
your state
doesn't offer a state-run insurance fund
and you can't qualify for private insurance, you
will be insured by an assigned-risk pool.
Cutting Workers Compensation Costs
Workers compensation premiums depend upon the nature
of your business, the jobs your employees perform
and the number of hours they work. Each
job type is
assigned a classification code. Riskier work is
classified as such and assigned a higher premium.
Thus, you might pay 48 cents in premiums for
every
$100 in payroll that goes to a clerk in a retail
store. By contrast, a truck driver's premiums might
set you back $9 per $100 of payroll. But there are
ways to control your costs. Try these strategies:
Review your classifications to make sure you're
using the proper codes. Ask to review your case with
your state workers' compensation rating bureau.
If
you aren't satisfied with the result, request an
onsite inspection and rating.
Consider a deductible. More than half of states
allow small companies to cut premiums by paying a
deductible on workers' comp claims. Paying
deductibles,
which typically range from $100 to
$1,000 per claim, can reduce your premiums by as
much as 25 percent.
Check your payroll. Most states don't require
you to include overtime in the payroll numbers used
to compute your premiums. If your state is one of
them,
make sure you don't figure in overtime.
Stay out of the Pool
If you're in an assigned-risk pool due to a poor
safety record or unusually high risk, you'll pay
high premiums for relatively poor service. Find out
why you're
in the pool. If the problem is your
firm's safety record, you should take steps to
improve safety and reduce the chance of accidents in
your workplace.
Enhancing workplace safety will
improve your workers' quality of life as well as
your bottom line. Consider some of the following
ideas:
Give each employee a workplace safety manual
that details rules and safe work practices.
Conduct regular inspections of the facility to
identify and correct hazards such as poor lighting,
unsafe warehouse and ergonomically incorrect workstations.
Communicate to employees the importance of
safety in the workplace. Award and recognize safe
operations.
Write safety procedures and distribute them to
anyone who drives a vehicle for your business.
Keep detailed records of all accidents and set
quantifiable goals for improvement.
Create return-to-work programs for injured
employees and stay in close contact with employees
who are out.
Use ergonomic products. The right chairs,
keyboards, mats and tables can sharply reduce
claims.
Provide protective equipment. Goggles, helmets,
gloves and other safety gear make sense in many
situations.
For additional questions about
Workers Compensation Coverage or to obtain an accurate
quote please complete our online form
below.
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