Workers compensation laws were designed to provide monetary benefits to indemnify employees who are injured on the job. As a result, workers compensation can reduce the need for litigation for both parties. It also helps control the financial risks employers face by placing monetary values on all work related injuries.
Most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not accident or health insurance. Workers Compensation is the most broad policy that an owner can purchase for their business. It is always recommended that owners purchase this coverage even if their state does not require them to do so.
Each state has different work compensation laws that govern the amount and duration of lost income benefits to employees hurt on the job, the provision of medical and rehabilitation services and how the system is implemented.
Workers Compensation Insurance Coverage pays for injuries sustained while on the job for employees and uninsured subcontractors of the contractor.
Workers’ Compensation Pays the Following Benefits:
• Medical Bills
• Lost wages (usually based on 66 2/3% of the average weekly wage for the past year)
• Lump sum payment for permanent disability and disfigurement
• Death Benefits
Workers Compensation policies also contain coverage known as Employers Liability, which provides protection where an injured worker refuses the above benefits and decides instead to go to court over the injury sustained to collect additional benefits. A worker has to choose one remedy over the other. An injured worker can not choose both remedies by collecting work comp benefits and pursuing legal action against the owner.
How is Work Compensation rated?
The cost of workers compensation for s is based on a rate per $100 of payroll paid to employees or uninsured subs and varies per the type of work to be performed (ex: framing, interior trim, painting, etc.) There are also additional factors such as expense constants, experience modification, assigned risk adjustment premiums, scheduled debits and credits, and minimum premiums that impact the final premiums. The final premium of a Workers´ Compensation policy is subject to an audit of your financial and tax records by a representative from the insurance company. Shortly after the annual policy term expires, the auditor will determine the proper classifications as well as the actual payrolls paid to employees and the amounts paid to your uninsured subs.
Many owners are deceived into buying seemingly cheap Workers Compensation policies from unethical insurance agents that provide quotes with payroll/sales figures that are far below what actual figures that should be applied to their business. As a result, businesses are hit with staggering additional premiums upon expiration of their workers compensation policy. This premium is also subject to collection within a month of the audit. Failure to pay audit premiums result in cancellation of your current workers compensation policy in the future. It is immperative that an owner partners with an agent that can properly classify their business and that can apply current and accurate figures to insurance companies. The Maxwell Insurance Group is committed to doing the right thing for our clients. We provide our clients with a true reflection of their workers compensation.
For more information about how to manage your Workers Compensation coverage, contact an agent at the Maxwell Insurance Group. We represent every major workers compensation company in the region.