Workers’ Compensation Insurance
Workers’ Compensation Insurance
It’s time for a smarter approach to workers’ compensation insurance.
What is workers' compensation insurance?
Workers' compensation insurance protects employees and employers from liabilities associated with workplace injury and death. Workers’ compensation can provide medical care, disability, rehabilitation and survivor benefits to those injured or killed in work-related accidents.
We’ll help you understand the applicable regulations and identify coverage options that reduce liability risks to your organization. You can meet your compliance requirements, lower your costs and still protect your employees the way they deserve.
Workers’ compensation insurance is required of all businesses in 49 states (Texas doesn’t mandate coverage) and the District of Columbia. In most states, you’ll need workers' compensation insurance as soon as you hire your first employee. In others, it’s mandated after a certain number of employees. Some states require businesses to purchase workers' compensation insurance from state-run funds, while others allow it to be purchased from private brokers and carriers.
While most businesses are required to retain workers' compensation insurance, limits and premium costs will vary, depending on the state, industry, how many employees you have and, of course, your business’ risk profile and claims history.
Workers’ compensation insurance covers employees for injuries and illnesses sustained in the course and scope of employment, including:
- Medical bills
- Disability payments
- Rehabilitation and recovery costs
- Partial missed wages
- Funeral costs and survivor benefits
Workers’ compensation insurance also covers an employer’s legal defense fees and settlements/judgments, should an injured employee sue for a WC-ineligible workplace injury.
Workers’ compensation insurance does not cover every workplace injury. Coverage may be denied if any of the following apply to the injury:
- Originated outside the workplace
- Self-inflicted
- Resulted from a fight started by the employee
- Related to a felony
- Claimed after an employee is terminated or laid off
- Caused while the employee was under the influence of drugs or alcohol
Determining if your employees are employees or independent contractors is an important distinction. If you classify them the wrong way you could be on the hook for retroactive workers’ compensation insurance (not to mention federal and state taxes) if those individuals are laid off.
So how do you determine if a worker is an employee or an independent contractor? The first step is to explore the business relationship that exists between your organization and the worker. The general rule is the more control your organization has over the worker, the greater chance he or she will be considered to be an employee.
According to the IRS, worker classification can be determined by the following criteria:
Behavioral
Does your company or organization control or have the right to control what the worker does and how the individual does his or her job?
Financial
Are the business aspects of the worker's job controlled by you as the payer? This includes how the worker is paid, whether expenses are reimbursed, who provides tools and supplies, and so on.
Relationship
Do you have a written contract, and do you offer employee-type benefits to the individual? Will your relationship continue? Is the individual's work deemed to be essential to your business?
We’ll consult with you to make sure you’re choosing the right categories.
Workers’ compensation insurance is required of all businesses in 49 states (Texas doesn’t mandate coverage) and the District of Columbia. In most states, you’ll need workers' compensation insurance as soon as you hire your first employee. In others, it’s mandated after a certain number of employees. Some states require businesses to purchase workers' compensation insurance from state-run funds, while others allow it to be purchased from private brokers and carriers.
While most businesses are required to retain workers' compensation insurance, limits and premium costs will vary, depending on the state, industry, how many employees you have and, of course, your business’ risk profile and claims history.
Workers’ compensation insurance covers employees for injuries and illnesses sustained in the course and scope of employment, including:
- Medical bills
- Disability payments
- Rehabilitation and recovery costs
- Partial missed wages
- Funeral costs and survivor benefits
Workers’ compensation insurance also covers an employer’s legal defense fees and settlements/judgments, should an injured employee sue for a WC-ineligible workplace injury.
Workers’ compensation insurance does not cover every workplace injury. Coverage may be denied if any of the following apply to the injury:
- Originated outside the workplace
- Self-inflicted
- Resulted from a fight started by the employee
- Related to a felony
- Claimed after an employee is terminated or laid off
- Caused while the employee was under the influence of drugs or alcohol
Determining if your employees are employees or independent contractors is an important distinction. If you classify them the wrong way you could be on the hook for retroactive workers’ compensation insurance (not to mention federal and state taxes) if those individuals are laid off.
So how do you determine if a worker is an employee or an independent contractor? The first step is to explore the business relationship that exists between your organization and the worker. The general rule is the more control your organization has over the worker, the greater chance he or she will be considered to be an employee.
According to the IRS, worker classification can be determined by the following criteria:
Behavioral
Does your company or organization control or have the right to control what the worker does and how the individual does his or her job?
Financial
Are the business aspects of the worker's job controlled by you as the payer? This includes how the worker is paid, whether expenses are reimbursed, who provides tools and supplies, and so on.
Relationship
Do you have a written contract, and do you offer employee-type benefits to the individual? Will your relationship continue? Is the individual's work deemed to be essential to your business?
We’ll consult with you to make sure you’re choosing the right categories.
Employee or Contractor?
Don't Make the Mistake of Classification.
Misclassifying your workers puts you at risk of being liable to workers' compensation claims, tax penalties and other lawsuits. Watch to learn what to consider when determining whether your worker is an employee or contractor.
How We Helped Rytec Engage Employees and Minimize Workers’ Comp Claims
Rytec Corporation, a leading industrial door manufacturer located in southern Wisconsin, was facing growing exposure to workers’ compensation claims, among other risks.
We created a two-part plan that reduced experience modification rates by 20%.
6 Steps to Crack Down on Claims by Creating a Healthy Environment
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6 Steps to Crack Down on Claims by Creating a Healthy Environment
Healthy, safe, positive work environments — it’s more critical than ever that you have a handle on where and how your people do their work. While each industry and organization faces its own unique risks, you can address those concerns by following these steps. -
Introduce Pre-hire Screenings
Healthy employees are less likely to get injured on the job and will recover faster should they sustain an injury.
Healthy employees are less likely to get injured on the job and will recover faster should they sustain an injury. Have a third party perform physicals and functional capacity evaluations to assess a prospective employee’s ability to meet the physical requirements of each job. Make sure only qualified employees are hired and they are capable of carrying out the work they are expected to perform.
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Maintain or Enhance the Physical Workspace
Safe working conditions, in which sites are well maintained and regularly evaluated for hazards, will reduce injuries. You can also go a step further and support a healthy environment by:
- Setting aside areas for stretching or other exercise
- Offering healthy food options at company meetings and functions
- Providing access to stairwells, indoor and/or outdoor walking trails
- Purchasing ergonomic workstations
Next :Focus on the Work Itself -
Focus on the Work Itself
The nature of a job often poses the greatest risks. Establish work rules, train employees to carry out tasks safely and provide the necessary tools they need. And for jobs that are especially injury-prone, implement a daily check-in routine. -
Promote the Physical and Emotional Health of Workers
Without the proper attention to your employees’ physical and emotional health, the resulting stress and anxiety can increase injury and illness. Adopt formal wellness initiatives to support employees in their quest for better, healthier living.Next :Get Started Today -
Get Started Today
Companies that have promoted employee wellness and safety have seen a drop in workers' compensation insurance and disability claims by as much as 30% and a decrease in short-time sick leave by as much as 32%.
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