Individual states set many business insurance requirements, including those covering workers’ compensation. Because it is required for many businesses in most places, it is important for managers and human resource workers to thoroughly research workers compensation insurance rules and requirements in their jurisdiction.
What Workers Comp Insurance Covers
Although many people view it as just one more expense, workers’ compensation insurance provides a valuable benefit to employees. Having the right coverage can mean the difference between your business weathering a work-related accident and facing financial uncertainty. A few examples of what types of expenses that might be covered by a standard policy include:
- Medical payments for injuries sustained in a covered activity
- Lost wages due to a covered accident
- Long- and short-term disability resulting from a work injury or repetitive motion
- Death benefits and funeral expenses
How Premiums Are Calculated
Worker’s comp premiums are calculated based on industry risk standards. Previous safety records are also considered. As a result, businesses with solid risk management plans and strong track records for safety can save on their premiums.
Which Businesses Should Have Coverage
Since requirements vary by location, businesses should check with their state’s labor department about who must maintain workers’ comp insurance. Even when it is not required, however, you may want to consider coverage for your business and employees.
The right worker’s comp policy can be an important strategy for managing risk and liability within your business.