Most employees and employers, at least at a high level, understand that Workers’ Compensation Insurance helps to pay medical expenses and lost wages when an employee is injured on the job.

But, if you ask them, most, including a lot of company leaders, understand where workers’ compensation coverage starts and where it stops.

Workers’ compensation coverage must be provided by all employers.  It’s an insurance policy, just as vehicle insurance, health insurance, and general liability insurance are insurance policies.  However, unlike all but a few insurance programs, worker’s compensation can be purchased directly from an insurance company or through a broker like us.

The advantage you gain by working with a broker is that we work with dozens of different workers’ compensation providers and have experience with hundreds of companies like yours.

Insurance companies are in the business of protecting themselves, not your company.  This means that their goal is to place you in a policy that’s in their best interests, even if that policy leaves you vulnerable. 

This profit and risk reduction mentality also extends to the insurance agent who only works with one carrier. 

Brokers, on the other hand, force the insurance carriers to compete while also confirming that you have the correct coverage at the best possible price.

Workers’ compensation can also, in most states, be purchased through the workers’ compensation division of your state government.  In some states, this division will be managed inside the state’s department of insurance. In others, it may fall under the Secretary of State.

State-sponsored worker’s compensation insurance is made available because new businesses have neither any claims history nor work experience that they can demonstrate.  The state supports the insurance carriers by backing or sponsoring a portion of the financial risk associated with new companies.

The state also offers insurance when a company has more claims than its average competitor, known as high-risk worker’s compensation.

States also set standards for the rights of the employee and employer, as well as the process to follow in the event that an employee is injured and the possible compensation benefits that are available.

In every state, an injured employee who is hurt in the workplace is entitled to have their medical bills paid for and lost payroll covered.

However, many employees make the mistake of thinking that workers’ compensation will cover them if they have a vehicle accident and are injured on the way to work.  This is rarely accurate. In this case, the employee’s injuries and the vehicle and/or property damage would be covered by the employee’s own vehicle insurance.  

In the case where the employee is injured going from a customer site to another customer location, the coverage could come from workers’ compensation but could also come from your commercial vehicle policy.

In all workplaces, state and local laws govern employee safety, as well as providing employer and employee training to reduce or eliminate workplace accidents, which are not good for the employee who has to recover from their injuries, nor the employer who loses the employee’s productivity.
Some employers try to avoid the expense of workers classified as employees by declaring the workers as independent contractors.  We aren’t here to offer legal advice. What we can suggest is that you consult legal counsel to determine if your workers are independent contractors or employees.

In the case of employees, a workers’ compensation insurance broker like us will help you to divide your employees into different groups, because workers’ compensation carriers view different jobs is higher or lower risk.  Office employees are considered low risk, for example. You’ll also separate corporate officers, as they are not generally covered by workers’ compensation.

Everything about your policy cost will come down to risk. The carriers will decide what they believe that their risk is.In addition, the carrier will establish limits related to mid-term disability and permanent disability. One important thing to understand is that your employees are covered regardless of who might be “at fault.”  If an employee is not following your policies and is injured, they will still be covered. But, those policies and procedures are something that your managers need to constantly train and retrain on.

If you are a truly small business, it’s up to you to establish and maintain a safe workplace for your employees.The fewer claims you have over time, the lower your workers’ compensation cost will be. And, at the end of the day, it’s good for your business to have employees working safely.