What is Workers’ Compensation?

man holding his back in pain

Workers’ compensation, often called workers’ comp, is a type of insurance that protects employers from liability if one of their staff members is injured at work. It ensures that your team members get the medical care and attention they need if they have a workplace accident, regardless of who is at fault.

Workers’ comp provides coverage for your employees’ lost wages, medical bills, and other expenses. It can also provide death benefits to the family if an employee passes away due to a work-related injury or illness.

Besides providing coverage for your team, your insurance also protects you and your small business. It helps limit the chances someone will sue you for injuries, and it can help you pay for legal expenses if an employee does sue you.

Do I have to carry workers’ compensation?

You will likely need to carry workers’ comp, but it will depend on the state you operate in, how many employees you have, and your industry. Each state will dictate when to buy coverage, what type of coverage to carry, and when to report any accidents. If you’re a sole proprietor or a partner, you might not need to purchase the insurance until you hire your first employee.

If you don’t purchase workers’ comp, you could face large fines and be responsible for any medical costs or legal fees that arise from a work-related injury or illness, which could quickly drain your small business’s resources.

What type of workers’ compensation coverage does my business need?

The type of coverage you need to carry may be impacted by the number of employees you have, the amount of your payroll, and whether your small business has a history of workplace accidents. It can also be impacted by your industry. For example, construction companies are often required to carry more coverage than a company who primarily employs office workers.

What happens when I report a workplace injury?

If one of your employees is injured at work, ask them to fill out any necessary paperwork. If you are unsure what paperwork is necessary, then ask your insurance company representative or contact your state for guidance. The worker’s report will likely need to provide the date and time of the injury, the type of injury, and how the injury occurred.

After the appropriate paperwork has been filled out, submit it to your insurance company and ask the employee to mail the company their medical reports. It’s important that you tell your insurance company about any injury as quickly as possible, so your staff member can get the appropriate treatment quickly. A minor injury can turn into something much worse down the road, so it’s necessary to report every injury, no matter how small or if the injured person says they don’t want to report it.

After you’ve reported the injury, your insurance company will handle just about everything. If there’s an investigation, cooperate with your insurance company and provide any information they ask for, but they will most likely work directly with your employee after you have filed the paperwork.

After your worker has recovered from the injury, they will need to provide you and the insurance company with written notice that they are recovered and wish to return to work.

How can I keep my workers’ comp premiums low?

First of all, prioritize prioritizing safety in the workplace. You can do this by including policies in your employee handbook and making sure your staff understands and follows the rules. You should also include a policy for documenting workplace accidents, so you can quickly provide the requested information to your insurance company. Learn more about creating an employee handbook.

Some states permit you to purchase workers’ comp from a private insurance company. If this is the case in your state, shop around to receive the best coverage for the best price. When you’re shopping, provide accurate payroll data and up-to-date records of any workplace safety incidents to ensure your pricing is accurate.

You can also look for state-sponsored programs, like drug-free workplace workshops, to help earn discounts on your premiums. For example, in Georgia, if you complete the steps necessary to become a State Certified Drug Free Workplace, you will qualify for a 7.5% discount on your workers’ compensation insurance.

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