Everything You Need To Know About Worker’s Compensation   

Every business with a certain number of employees in the USA has to address the issue of worker’s compensation coverage. The term worker’s compensation is like any other business insurance that provides a level of financial protection against the loss that results from insured perils. However, the minimum coverage requirement and the exemptions differ in almost every state. Without going into the legal technicalities, let’s discuss worker’s compensation in a generic domain.   

Who Needs Worker’s Compensation?  

Among the states which require employers to have worker’s compensation coverage, there is a range of exemptions for business with a limited staff. However, there are some states in the USA like Alaska, which require that any business with one or more employees must have worker’s compensation insurance. On the contrary, Florida, another state of USA, exempts businesses with fewer employees. Hence, any business with any number of employees working either full or part-time is exposed to extensive out of pocket costs if an employee gets sick or injured on the job. This means that not having insurance by your side does not liberate you from paying for the costs of work-related illnesses or injuries. Even though if your business is statutorily exempted from this coverage, then, you should carefully calculate the potentially shattering costs of not having insurance minimal premium savings.   

The Policy

Worker’s compensation is independently regulated by each state. Worker’s compensation coverage is significantly different from one state to another. The potential differences don’t lie in the structure of policies but in the way benefits, coverage and other premiums are computed. Therefore, if you have shifted or operated in more than one state then you should know that policies are changed in every state subject to their laws and the minimum coverage. Unlike most another form of compensation, worker’s compensation policies do not have a face value. On the contrary, their policies are typically divided into two parts. Firstly, addresses statutory liabilities as defined by state laws. Secondly, it is related to employer liability for injuries that are not addressed by those state compensation statues.     

Controlling Cost for the Business    

Workers compensation premiums can range from marginal to very high, depending upon a number of factors, such as the number of employees, your claim history and the industry. However, there is very little you can do about the factors that determine premiums. However, there are steps that can help you in paying the lowest possible rate for the coverage.   

Avoiding Assigned Risk  

An assigned risk is the type of business risk which is not considered good risk because they have an extensive claim history or they represent an unusual risk. A business can consider an unusual risk because either they are new or their employees perform dangerous work. Therefore, you should always ask and insist on knowing whether your policy was issued as an assigned risk. If your policy is assigned risk, then it is advisable to talk your agent about having your policy direct-written by a different insurance company.   In a nutshell, worker’s compensation lawyer is of immense importance, make sure before signing the paper you know everything and that serves in the best interest of you and your family.

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This post was written by Mark Kennedy