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5 Things You Need to Know About Workers’ Compensation Insurance

1. Workers’ Compensation Insurance Protects Your Company.

The primary purpose of Workers’ Compensation Insurance is to provide coverage for health care costs to an employee injured on the job. If Workers’ Compensation is mandated in your state of operation you must carry this coverage to avoid your company being liable and subject to fines by the state.

2. You May Need Coverage for Independent Contractors.

Despite the fact that independent contractors are not considered your employees for tax purposes, they may be considered your employees when it comes to Workers’ Compensation. You should secure a certificate of insurance showing proof of Workers’ Compensation coverage from Independent contractors to avoid them being classified as your employees.

3. Compliance is Critical.

Non-compliance can result in serious consequences. Civil and/or Criminal fines can range from $1,000 up to $50,000 and could apply to those without insurance.

4. You Have a Variety of Options to Choose From.

In New York State, you have many options to choose from in terms of obtaining insurance. These include purchasing it through a private insurance company or through the New York State Insurance Fund; self-insuring if you are a large employer; or joining a group self-insurance program.

5. Who Doesn’t Need Coverage?

The only time you don’t need Workers’ Compensation coverage is when you do not have any employees.

Tips for Containing Workers Compensation Costs

There are a lot of things you can do to help contain Workers’ Compensation costs, which can lead to inflated medical costs for your company:

  • Develop a Workers’ Compensation policy. A standard policy will spell out the responsibilities of employees and supervisors in case of injuries on the job.
  • Provide education & safety programs. A safe workplace will result in fewer claims and reduce the probability of a serious claim.
  • Invest in a wellness program. One of the principal cost drivers of Workers’ Compensation claims are medical expenses for the treatment of job-related injuries and illnesses. A dedicated wellness program can help address some of the major issues impacting claims. Learn more about how wellness programs can prevent workers compensation claims.
  • Investigate claims thoroughly. A prompt incident report and thorough investigation will establish facts early, reducing fraud and delays. An early medical strategy can save money and return employees to work sooner.
  • Monitor each case. Keep in touch with the injured employee after the claim is filed and benefits begin.
  • Develop a return-to-work program. Your most important duty in the Workers’ Compensation system may begin when the doctor releases your employee to return to work with physical restrictions or modifications. Before the employee returns back to work, make sure expectations of both the employer and the injured employee are clearly outlined.

For more information on workers compensation, or to take a look at your overall risk management plan, contact us today.

The above description provides a brief overview of the term and phrases used within the insurance industry. These definitions are not applicable in all states or for all insurance and financial products. This is not an insurance contract. Other terms, conditions and exclusions apply. Please read your official policy or full details about coverage. These definitions do not alter or modify the terms of any insurance contract. If there is any conflict between these definitions and the provisions of the applicable insurance policy, the terms of the policy control.