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5 Tips for Choosing Workers’ Compensation Insurance
If you’re running a company and have employees working for you, you most likely require workers’ compensation insurance. Obtaining proper workers’ compensation insurance helps companies maintain and grow their businesses, covering medical expenses and lost wages caused by work-related injuries and illnesses and lowering any long-term risk.
Some states even have laws in place that make an insurance package mandatory, meaning that businesses aren’t allowed to work without workers’ compensation insurance.
Regardless of what type of business you’re running, ensuring that you’re fully covered is critical to maintaining a safe company culture and mitigating potential risks.
If you’re just starting with no insight into how much is workers comp insurance for your business and how to find the right policy, it can feel overwhelming. This is why below we offer 5 tips to get started and determine the best coverage for your specific needs.
Know Local Regulations on Workers’ Compensation
Your priority when choosing your workers’ compensation insurance is to review and understand your state’s requirements as this type of compensation is controlled at the state level. Your local authorities will put you in the right direction for finding insurance and determining which workers should be insured.
Consider the All States Endorsement option if you are required to comply with the laws of any state in which your workers work. In addition, keep in mind that workers’ compensation only covers on-the-job injuries, so you may need general liability coverage for any injuries or damages that aren’t covered by workers’ comp.
For instance, the number of people you hired will determine whether you’ll need to obtain workers’ comp. If you have more than one employee, you will be compelled to do so in the majority of states. Finally, the best way to ensure that you are always in compliance with your state’s laws is to stay informed about them and fully comprehend them.
Budget and Track Payroll
It’s doubtful that your payroll will stay the same for a year, whether your company is expanding, heading into decline, or experiencing turnover. In addition, there are various payroll systems for various employee types, including full-time, part-time, family members, hourly workers, and temporary workers.
As a result, you should estimate your annual payroll based on your existing circumstances when purchasing workers’ compensation insurance. Your end-of-the-year audit will include a review of the actual payroll, after which your insurance provider will either give you a credit or send you a bill. Make sure to keep track of and report on your current payroll year-round if you want to improve cash flow. As your income fluctuates, certain insurance companies will adjust your coverage and, consequently, your premium.
Find a Good Agent or Broker
One of the most important things when choosing workers’ compensation insurance is finding a good insurance agent or broker. This is invaluable as they can educate you on the best policies that are aimed at protecting your business.
Look for someone who is both a professional and knowledgeable in your specific field. Your agent should know enough about the workers’ compensation laws in the area where your business is located to be able to give you advice on how to implement safety controls that can help lower your insurance rates.
Understand What Workers’ Compensation Insurance Covers
Workers’ compensation mainly covers bodily injuries caused by an accident while in the course and scope of employment and bodily injury caused by diseased or aggravated by the conditions of the employment.
Benefits such as medical treatment and disability are usually paid without regard to who is at fault for an injury or accident. However, you should be aware that workers’ compensation benefits will not be available if an employee is injured as a result of criminal activity.
Review Your Policy Regularly
You must make sure to review your insurance policy at least once a year alone or with your agent and address any changes in your business operation that might affect the coverage or the premiums. This can include changes to the work being carried out, the states in which your employees perform their duties, the use of independent contractors, and your total payroll or any other remuneration paid for work.
You might even be able to save money on your policy depending on these changes. This is why you should make sure to discuss all changes to your business operation with your insurance agent or carrier.
Conclusion on Workers’ Compensation
Securing your employees and having safety plans in place is of utmost importance when running a business, regardless if it’s a high-risk or office-based environment. Choosing the right workers’ compensation insurance is the best solution to protect your staff from the outset. Reviewing your insurance policy and keeping it up-to-date will help you safeguard both your company and your employees.