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Workers Compensation

Purpose of Workers Compensation Insurance

Workers Compensation Insurance is required for most companies in the United States.  State rules however may vary.

Employers should consider workers’ compensation insurance as an essential component of their risk management strategy.

This insurance not only safeguards the well-being of employees by providing financial support and medical care in the event of work-related injuries or illnesses but also protects the business from significant financial loss and potential legal liabilities.

By ensuring that employees receive timely and adequate compensation, employers can foster a safer and more productive work environment, enhance employee morale, and uphold their reputation as responsible and caring employers.

State Insurance Departments'

Employers Guide to Workers Compensation Insurance

Protecting You

Workers Compensation Benefits 

Workers’ compensation benefits cover necessary medical care for employees with work-related injuries or illnesses and provide wage replacement for time lost from work without a predefined limit. This system ensures that injured workers receive both comprehensive medical attention and financial support during their recovery, facilitating their return to work without the burden of medical expenses or lost wages.

No Fault Benefits for employee accidents

The no-fault nature of workers’ compensation claims benefits both employees and employers. In this system, injured workers receive medical care and wage replacement without needing to prove employer fault, ensuring swift access to support. For employers, it reduces the risk of costly lawsuits, fostering a more cooperative workplace. This streamlined process enhances workplace relations and promotes a culture of safety and support.

Medical Benefits

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Wage Replacement

Wage Replacement

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Disability Benefits

Business woman suffering from stiff shoulders

Occupational Illness

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Death Benefits

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Protecting Others

Employer Liability

Employer’s liability coverage is a critical component of workers’ compensation insurance that provides additional protection to employers against lawsuits from employees. This coverage specifically addresses situations where an employee might sue for damages due to injuries that are not fully covered by the workers’ compensation part of the policy.

This coverage ensures that employers have a financial and legal safety net in the event that workers’ compensation does not fully cover an employee’s claims, protecting the business from potentially devastating financial impacts.

Employers can choose their limits of coverage.

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Injured Employee Lawsuits

Employers liability insurance is an essential form of protection for businesses, covering claims that state workers’ compensation statutes deny. For example, if an employee is injured while intoxicated at work, employers liability insurance can provide necessary coverage.

An injured employee’s spouse/children may file a “pain and suffering” lawsuit. These damages typically fall into one of three categories – damages for loss of services, damages for loss of support, and damages for loss of quality in the marital relationship, which includes acts like providing affection or emotional support. 

Third Party Lawsuits

If an employee is injured and a third party is deemed partly at fault, and the employee sues that third party, the third party could then sue the employer. Employer’s liability insurance can cover the employer in these complex legal situations.

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How Premiums are calculated:

1. A primary factor is the rate determined by your business classification (based on the risk of the job duties). Insurance companies set different multipliers for different job classes.  The multiplier is multiplied by your payroll amount to get a rate.  Those with a lower multiplier, generally offer lower rates.

2. The premium paid at the start of the policy period is considered a “deposit.”  This is based on an estimated payroll for the next 12 months.  At renewal, the employer will be audited and billed or reimbursed for any difference based on actual payroll experience.

3. Additionally, Experience Modification or Merit Rating which can apply a discount or surcharge depending on loss history.

Do you have...

Different Job Duties for Different Employees    –     Out of State Operations     –     Work from Home Employees

Written Safety Procedures     –     Employees under 16 or over 60      –     Physicals Required for Employment

Prior Claims     –     Subcontractors     –     Seasonal Employees    –     Employee Health Insurance or Retirement Plan

Please be sure to mention this to your HTA Advisor 

WC 2.5

Since experience rating influences the premiums you pay, there is an incentive for employers to develop loss prevention programs.

General look-back period is 3 years with no claims.

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