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Workers’ compensation insurance is a crucial type of insurance if you’re a business owner with any number of employees. You may think that an accident or injury is unlikely to happen in your workplace, but statistics say otherwise.
If you’re unprepared, even just one big accident can quickly put you out of business with all the liabilities and expenses involved.
That’s why in this article, we’re going to talk about worker’s compensation: your most reliable protection against accidents and workplace-related injuries.
What Is Workers Compensation Insurance?
This policy is a type of government-mandated business insurance that protects you from liability and other financial expenses in case something happens to your workers.
When a workplace accident happens, you, as the owner, are generally the one liable for it. If the employee decides to ask for a settlement, you will be obliged to pay for everything out of pocket.
More than that, if they decide to sue for negligence, even if untrue, it could drag you into a costly legal battle that can suck the life out of your business.
Therefore, worker’s compensation isn’t just for the worker’s benefit. This insurance also exists to protect you from the financial and legal responsibility of any worker-related incident that may happen in the workplace.
The government also plays a significant role in facilitating this insurance. Factors such as the benefit limits, statute of limitations, extent of medical care covered, etc., will be decided by local laws. The government is also the one to determine if this insurance should be handled by a government agency or a private company.
Since it’s mandated by law, this type of insurance generally varies by state.
Who Needs Workers Compensation Insurance?
Practically every kind of employee will need worker’s compensation insurance.
As mentioned above, this type of policy is required by law and is imposed in every state, so if you don’t have it, you‘re not just financially vulnerable – you could also be fined for violations. Thus, it’s safe to say that if you have employees, you should get workers comp insurance for them.
A few businesses are exempted from this, but the exact categories differ in every state.
If you’re unsure whether you’re required to get one or not, you can always reach out to Magnum Insurance for a quick consultation or read more frequently asked questions. We’re in the business of making sure your business is protected as best as possible, so our highly qualified agents can help you with everything along the way.
How Does Workers Comp Work?
This type of policy works just like most commercial insurance plans.
Basically, if a worker is sick or injured while working, workers comp will cover all the medical expenses, payroll, and certain disability benefits whenever applicable.
This means your worker can receive adequate compensation for their condition without you spending anything out of pocket.
That said, worker’s compensation is much more than that. For the employees, agreeing to receive workers comp is also an agreement that they won’t press charges for the injury or lost wages. This is called a “compensation bargain,” mandated by law to protect both the employee and employer from a costly legal battle.
Keep in mind that employees can still sue you for things that aren’t covered by this policy, but these are typically rare exceptions like battery and false imprisonment.
Nevertheless, navigating what this policy means for your business can be complex, so you need to have a highly trained team to make the right calls. Here at Magnum Insurance, we guarantee that every policy you get is the best for you, your employees, and your business.
What Does Workers Comp Cover?
In general, workers comp includes a wide range of situations and benefits, although the specific insurance policy limits the benefits that the individual can receive.
Similarly, the exact coverage depends on the requirement of every state. Here are some of the most common inclusions:
Covered situations
Again, this policy protects workers against a variety of situations that can happen in the workplace. This could include physical injury, disease or illness, and unforeseen events.
Physical injury
This insurance policy covers any injuries that occur within the workplace or while working as dictated by their job description.
For example, accidents that happen on the commute to and from work are not included in most policies. However, if your employee was traveling on a business trip or was on their way to service a customer when the accident occurred, workers comp will cover it.
Disease or illness
Some jobs can also increase the risk of illness or disease, so any that happens within the “course and scope” of the employment is also included. Some examples of this include working with chemicals or fine dust.
Unforeseen events
Workplace comp will also cover any unforeseen scenario while at work, like natural disasters, workplace violence, and terrorism.
Benefits received
Workplace compensation covers all expenses related to the situations listed above. This includes all medical costs, treatment costs, income replacement, and disability insurance.
How Much Is Workers Comp Insurance?
There’s no set figure that determines how much you need to pay for workers’ comp insurance. The factors that affect the calculation of your monthly premium can include:
- Industry
- Employee’s job description
- History of claims
- Payroll
The NCCI, or National Council on Compensation Insurance, publishes a rough guide for businesses to assess the basic prices of their insurance premiums, depending on several factors.
However, consulting with qualified agents, like Magnum Insurance, is still the most reliable way of determining your monthly premium.
Workers Compensation Requirements
The specific requirements of workers’ compensation insurance vary by state, so if you need to look this up for your business, you’re going to have to consult state agency websites or other internet tools.
However, to qualify for a workers comp claim, there are five requirements:
- The injured claimant has to be an employee.
- The employer must have active workers comp insurance.
- The injury must have happened within the course and scope of work.
- The claimant must submit all required documents before the deadline.
- The injured claimant must submit themselves through the required procedures such as medical appointments, exams, and treatments.
Getting Workers Comp with Magnum Insurance
Workers’ compensation insurance is one of the most critical insurance policies you must have in your business. Without it, you’re facing a significant legal and financial risk in the future.
For all of your insurance needs, Magnum Insurance can guarantee you top-notch service tailor-made for your specific business needs.
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