Workers Compensation

Workers compensation laws were created to ensure that employees who are injured on the job are provided with fixed monetary awards. This eliminates the need for litigation and creates an easier process for the employee. It also helps control the financial risks for employers since many states limit the amount an injured employee can recover from an employer.

Workers Compensation Insurance is designed to help companies pay these benefits. As a protection for employees, most states require that employers carry some form of Workers Compensation Insurance. Workers Compensation Insurance is not health insurance. Workers Compensation is designed specifically for injuries sustained on the job.

In most states, if you have employees, you are required to carry Workers Compensation coverage. Even in non-mandatory states, it can be a very good idea, particularly if you have many employees, or if they are engaged in hazardous activities.

Do I need workers compensation insurance?

Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.

To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required to buy workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they're hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.

Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.

Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Workers compensation insurance must be bought as a separate policy. Although in-home business and business owners policies (BOPs) are sold as package policies, they don't include coverage for workers' injuries.

How much workers’ compensation coverage do I need? 

Your workers’ compensation insurance needs will depend on several factors. Our agents can work with your business to determine optimal coverage by considering the following: 

• Location—Legal requirements for workers’ compensation coverage may differ based on the state(s) in which your company operates.

• Industry—The type of work your business conducts can have a significant influence on your workers’ compensation needs.

• Number of employees/Payroll—In general, companies with larger workforces will require higher amounts of workers’ compensation coverage.

These criteria will also often be used by providers to determine your insurance costs. In addition, the following will also likely be considered: 

• Workers’ compensation class code—State officials and the National Council on Compensation Insurance are tasked with determining classifications for all employees based on the risk levels of the tasks they conduct at work. If you employ many workers with high-risk class codes, your workers’ compensation costs will likely increase.

• Experience modification rate—Your company’s prior incidents and future risk levels help determine this figure. An experience modification rate (EMR) of 1.0 represents average risk levels for companies in your industry. An EMR below 1.0 could help reduce your insurance costs while a rate higher than 1.0 could mean increased prices.

Get the Right Coverage 

Regardless of size or industry, any business that employs workers should strongly consider workers’ compensation coverage. Even companies that maintain safe workplaces and have minimal accident history can still be at risk. Something as simple as an employee slipping on a wet floor could have significant financial ramifications. 

Fortunately, the insurance experts at Consoles Insurance Agency are available to help. Our agents will use over 50 years of experience serving the Peabody area to help your company assess its workers’ compensation insurance needs and acquire optimal coverage. Contact us today to get started.