Worker's Compensation

--------------------------------------------------------------------------------
Overview
Worker's compensation protects an employer from liability for an accident involving an employee.

This insurance pays benefits to your employees if they are injured on the job. Specifically, it covers their medical bills, a portion of lost wages, vocational rehabilitation and death benefits. Almost every state requires by law that employers carry some form of worker's compensation insurance. Because the coverage amount is established by state law, benefits do not vary from company to company within the same state. Employers are protected by statute against other work injury liability, except in cases of extreme negligence.

Failure to carry it exposes the employer to pay what the insurer would have paid, plus severe fines, and possibly jail time for violating the law. The benefits may amount to hundreds of thousands of dollars. The employer has a legal duty to ensure that employees get the legally mandated benefits without delay.

--------------------------------------------------------------------------------

Who Is Covered?
Worker's compensation covers all the employees of the business. Special provisions must be made if an employee works out-of-state. It may cover the business owner if the business is a corporation, and the owner is actively involved in the business. Independent contractors are not covered.

--------------------------------------------------------------------------------

Where Do You Buy It?

Purchasing worker's
compensation insurance In a handful of states -- North Dakota, Washington, Ohio, Wyoming and West Virginia -- only the state can sell workers' compensation insurance. You may purchase worker's compensation insurance in the remaining states from either various insurance companies or from a state compensation fund. A state compensation fund is an insurance company that is established to ensure coverage is available to all employers.

--------------------------------------------------------------------------------

What Affects the Rates?

How to lower your premiums

How to minimize the risk of claims

When an accident occurs
Worker's compensation premiums are based on the amount of your payroll. The higher your payroll, the more you will pay in premiums. Premiums also vary depending on the work function or job classification of an employee. For example, the premium for a construction worker would generally be much higher than a premium for a clerical worker. Employers are expected to accurately report payroll by classification of work performed. An advisor can help you find which classes apply to your employees.