Workers' Compensation Insurance
Help protect your employees and your business. Workers' compensation insurance provides benefits to employees who suffer work-related injuries or illnesses.
What is workers' compensation insurance?
Workers' compensation insurance, often called workers' comp, is a type of business insurance that provides benefits to employees who suffer work-related injuries or illnesses. It helps cover their medical care, replaces a portion of their lost wages while they recover, and can provide death benefits to their families if a workplace accident is fatal.
In addition to protecting your employees, workers' compensation also helps protect your business. By accepting workers' comp benefits, employees generally waive their right to sue your company for the injury, shielding you from potentially devastating legal costs.
What does workers' compensation cover?
Medical Expenses
Helps pay for hospital visits, surgeries, medications, and other medical care needed to treat a work-related injury or illness.
Lost Wages
Replaces a portion of an employee's income if they need time off work to recover from their work-related injury.
Rehabilitation Costs
Helps cover the cost of physical therapy or vocational rehabilitation if the employee needs help returning to work or learning a new skill.
Death Benefits
Can provide financial assistance for funeral expenses and support for the deceased employee's dependents if a workplace accident results in death.
Do I need workers' compensation insurance?
In most states, workers' compensation insurance is required by law as soon as you hire your first employee. The specific requirements, including exceptions for certain types of workers (like independent contractors or seasonal workers) and the number of employees that trigger the requirement, vary significantly from state to state.
Failing to carry workers' compensation insurance when required can result in severe penalties, including hefty fines, stop-work orders, and even criminal charges. Even if your state doesn't require it, carrying workers' comp is a critical way to protect your business from the financial impact of workplace injuries and lawsuits.
How is the cost of workers' comp determined?
The premium you pay for workers' compensation insurance is based on several factors, including:
- Your payroll: Premiums are typically calculated as a rate per $100 of payroll.
- Your industry and class codes: Different jobs carry different levels of risk. A roofing company will pay higher rates than an accounting firm because the risk of injury is much higher.
- Your claims history: Your Experience Modification Rate (EMR) reflects your past claims history compared to other businesses in your industry. A history of frequent or severe claims can increase your premium, while a strong safety record can lower it.
- Your location: Rates vary by state due to differences in state laws and benefit levels.
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