Understanding The Basics Of Workers' Compensation
What Is Workers' Compensation?
Workers’ compensation provides benefits to employees who experience injuries or illnesses while on the job. The main goal of workers’ compensation insurance is to protect both the employee and the employer from any financial loss associated with the injury or illness. In most cases, employees can receive workers’ compensation benefits, regardless of who is at fault for the occurrence.
What Is a Workers' Compensation Carrier?
A workers’ compensation carrier is a company that holds and manages workers’ compensation insurance policies. An employer pays workers’ compensation premiums to the carrier for coverage, and files any necessary claims with the carrier. American Liberty Insurance is a workers’ compensation insurance carrier that works with insurance agents, who in turn, provide coverage to employers.
What Do Workers' Compensation Benefits Cover?
Work comp benefits are used to cover the medical expenses accrued due to an employee’s illness or an injury. Benefits can also be provided for temporary disability when an employee is unable to work. Ultimately benefits differ, depending on the type of disability resulting from the injury or illness and state regulation.
In some states, additional compensation is available for mileage reimbursement, death benefits and funeral expenses, depending on the case. Injuries or illnesses that occur off-site may still be covered if the employee is involved in work for the employer. For example, off-site training, traveling between work sites and working remotely could all be covered by workers’ compensation insurance.
Does My Business Need to Have Workers' Compensation Insurance?
Most businesses in all 50 states are required to have workers’ compensation insurance, with very few exceptions. Most states require an employer with 3 or more employees to carry workers’ compensation coverage, but it is important to check the laws of your state.
What Happens If I Don’t Have Work Comp Coverage for My Business?
Employers who do not carry workers’ compensation coverage for their employees run the risk of facing the varying state-by-state consequences. In some states, employers without insurance can be fined an initial penalty of $1,000, and up to a third penalty of $10,000. In others, the penalty could be $1,000 or three times the amount of the premium an employer would have paid for insurance during the non-compliance period.
How Much Does Workers' Compensation Cost?
The cost of workers’ compensation insurance depends on many factors, including:
- The laws and regulations for your specific state: In most states, workers’ compensation is a requirement, with a few exceptions.
- The number of employees and the level of pay within your company: Workers’ compensation is used to cover an employee’s medical bills and lost wages. If your company typically pays higher wages or includes a high number of employees, your work comp coverage premiums will cost more.
- The type of company: Companies requiring employees to work in high-risk environments typically pay higher work comp premiums.
To understand the costs associated with your coverage needs, it is best to reach out to an insurance carrier. American Liberty Insurance will help you understand your company’s unique situation, to create a workers’ compensation coverage plan that works best for you.