If you’re running a business, it’s important to ensure the working environment is safe. But even with all the safety measures in place, accidents still happen. The US Bureau of Labor Statistics recorded over 5,250 work-related injuries in 2018.
All these injuries led to financial losses to the victims; hence they need compensation. If you have employees in your business, the law requires you to get workers’ comp insurance. This way, the law will not hold you liable for the losses.
But how much is workers’ comp insurance for a business? This article will shed some light on that and all the things that might determine the cost.
How Much Is Workers’ Comp Insurance?
Like any other insurance, the amount your business will pay for workers’ compensation depends on many things. Some of the things that you should consider when computing this cost are the size of your business, risk factors, and the number of employees. If you’re getting workers’ comp for a small business, then no need to worry because it won’t cost you much.
Well, there are other costs in addition to the insurance premium amount. One of them includes the administrative cost that the insurance takes for handling claims. You’ll also pay extra for payments made under deductibles and the amount incurred to report to the state and your insurer.
If you compute all these costs, a small business with just a few employees will have to pay around $2,000 to $3,000 in premium for their workers’ comp insurance annually. As you hire more employees, the payroll increases and the premiums will also increase.
If your employees are exposed to dangerous work environments hence likely to make workers’ compensation claims, you’ll naturally have to pay more. But you should also try to implement safety programs and a drug-free workplace. This way, your insurance provider can offer you some discounts.
You should also do your homework to find an insurance company with a ‘pay-as-you-go’ solution. These providers base their charges on payroll numbers so you can pay your premium after each payroll. This payment method will save your business from making large upfront payments.
What Does Workers’ Comp Insurance Cover?
Since you’re paying some money for it, it’s natural for you to want to know what this money will cover. Well, the money offers different coverage that ensures financial protection for victims affected by work-related accidents or illnesses.
Here is a list of things that the insurance will cover.
Number one on the list of things you’ll pay for in your workers’ compensation insurance is the medical bills. Victims of accidents have to undergo some form of treatment after the accident. Common claims are traffic accidents, but sometimes employees can get sick due to occupational hazards.
As long as the parties concerned can prove a connection between the illness and their occupation, they need compensation. Medical expenses include ER visits, diagnostic testing, and all the hospital and doctors’ bills. These will not take into consideration the party at fault.
In case of an injury or an illness, a worker will be incapacitated for a while. This means they’ll spend some time outside their work. In extreme cases, they might suffer permanent disability, forcing them to leave their work forever.
In any of the above cases, the workers’ compensation insurance will reimburse them for wages lost. This will also depend on the particular state, with most of them offering 66% of their usual weekly earning. The compensation for lost wages is usually paid on a tax-free basis.
Other states offer what’s called a ‘Loss of Earning Power’ benefit. This is a partial compensation where an employee returns to work on a limited basis.
Funeral Expenses and Death Benefit
Other occupational-related injuries and illnesses result in the death of victims. In this case, the workers’ compensation insurance will cater for the funeral expenses. In addition, they also award the dependents of the deceased some death benefits.
Some states do not have an exclusive remedy rule that ensures that businesses pay workers’ compensation insurance. In these cases, such accidents or illnesses can lead to a court case. The business may need to pay defense costs, the judgment awarded by the court, and settlement expenses.
The workers’ compensation insurance policy will cover such costs on behalf of the business.
Rehabilitation and Therapy
Sometimes, employees get injured due to repetitive physical motions. Such can cause stress forcing an employee to seek rest and rehabilitation. Workers’ compensation insurance will cover the cost of therapy and rehabilitation.
In other cases, the coverage may extend to wage lost coverage if the employee is forced to take some time off work. An example of such cases includes the carpal tunnel syndrome that affects most employees.
Do You Need Workers’ Compensation Insurance?
For something that’s going to cost your business some money, it’s essential to know whether you need it or not. Make sure you do some research on your state requirements of workers’ compensation insurance.
Also, check within your business to see how much your workers can be exposed to injuries and the amount it can cost your business. Workers’ compensation protects your employees from incurring losses after an injury. It also protects your business from lawsuits and penalties.
Secure Your Employees Wellbeing With Workers’ Compensation
Before opening the doors of your business and hiring your first employee, you need to carry out some research on the insurance laws of your state. You also need to know how much is workers’ comp insurance in your state. This way, you’ll be more prepared with all the requirements hence protect your business and your employees.
To find the best workers’ compensation insurance for your business, contact NWCS. You’ll get to work with a staff with all the experience and expertise regarding workman’s compensation to ensure you get the best solution.