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Workers' Compensation: FAQs

There are many commercial insurance options available to help business owners mitigate the risks of financial loss. While each company has its own unique needs for coverage, any business with employees can find it beneficial to invest in workers' compensation insurance. This particular form of insurance coverage will take care of staff members who suffer an illness or injury while at work. As the owner of a business, it is crucial that you are familiar with your responsibility of having workers' compensation and how it not only protects your employees but you as well. Here are the answers to a few frequently asked questions.

Who Is Required to Have This Form of Insurance?

Most state laws require that the majority of businesses have workers' compensation insurance coverage, regardless of how many employees it has. There are exceptions to this rule, such as for clergy members, non-profits, and individuals who are covered by other programs. However, even in the event you don't have to carry this insurance, you will not be absolved from the liability should a work-related injury occur.

How Does Workers' Comp Work?

When a staff member is hurt at work, he or she can file a claim to collect benefits that can help them cover lost wages and medical costs. This gives up their individual right to sue you, the employer. Therefore, having workers' compensation insurance is important to your overall risk management strategy. The policy will not cover self-inflicted injuries, non-work-related injuries, injuries caused by drug or alcohol use, or injuries resulting from company policy violations, a fight that the employee started, or horseplay.

What Types of Illnesses and Injuries Are Typically Covered?

Workers' comp insurance tends to cover a large assortment of illnesses and injuries. Some examples include burns, broken bones, hearing loss, lung cancer or disease due to exposure to toxic chemicals, repetitive stress injuries from repeatedly performing the same task, and mental health issues.

How Are Coverage Costs Generally Calculated?

There are several factors that are taken into consideration to determine the cost of workers' comp insurance. For instance, some of these factors include the number of employees, the kind of work that the employees perform, the location of the business, and the history of claims. Ultimately, your premium will be lower if you have filed fewer claims. To ensure that your employees are protected and your costs are minimal, workplace safety should be made a top priority.

If you choose not to invest in workers' compensation insurance for your business, you may find yourself fined and facing lawsuits from employees. If you would like to learn more about workers' compensation and how it can protect your company, contact a commercial insurance agent in your area today.