Frequently Asked Questions About Workers Comp. Insurance
Q. Do I need Workers Compensation Insurance?
Yes, Federal and State laws requires employers to have workers' compensation insurance if they have even one employee.
Yes, Federal and State laws requires employers to have workers' compensation insurance if they have even one employee.
Q. How many questions do I need to answer in order to get a quote?
Our application is specifically designed to provide 20+ insurance companies with a complete information about your business operations. Some questions are mandatory (Business Name, Address, Number of Employees and Payroll Information, Federal Employer Identification Number, Prior/Current Insurance Information, Loss History). Some questions are optional, but your answers to these will help us to expedite the quoting process.
Q. My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?
Generally, coverage for sole owners is optional. You would, however, need to have workers' compensation coverage for any employee you may hire, even if it's just one employee, and even if it's just temporary employment. You should consult with your attorney, insurance agent or broker, or carrier regarding the specifics of your situation and your options.
Q. Are executive officers or directors of the company covered under its workers' compensation policy?
Generally, all employees of the company, as legally defined, including corporate officers and directors, must be included in the policy unless they are the sole owners of the firm. In the case of sole owners, they may elect not to be covered. Several sections of the Labor Code (refer to your State specific Labor Code) must be considered to answer this question. You should consult with your attorney, insurance agent or broker, or your carrier regarding the specifics of your situation.
Q. How much does workers' compensation insurance cost?
Workers' compensation insurance premium rates are not regulated by the state. Rates can vary from carrier to carrier.
Q. What determines how much I'll pay for my premiums?
A number of factors go into determining the annual premium an insurance carrier will charge. These include your industry classification, your company's past history of work related injuries (known as your experience modification), your payroll, any special underwriting adjustments such as use of a certified health care organization, and any special group or dividend programs you may be eligible for.
Q. Where do I get the claim forms I need to give my employees if they get sick or hurt because of work?
Your workers' compensation claims administrator - generally your insurance carrier or third party administrator if you are self insured and have one - provides the claim form in the quantities you need.
Q. What happens if I'm uninsured and an employee is injured?
Failing to have workers' compensation coverage is a criminal offense. If an employee gets hurt or sick because of work and you are not insured, you are responsible for paying all bills related to the injury or illness. You should be aware that workers' compensation benefits are only the exclusive remedy for injuries suffered on the job when you are properly insured. If you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers' compensation claim.
Q. Can I be fined for not carrying workers' compensation insurance?
Please consult your legal adviser about possible consequences you and your business can face for not carrying workers' compensation insurance.
Q. How does an employer request a Workers Compensation premium and loss history report?
Workers Compensation premium and loss history reports (commonly referred to as loss runs) must be requested in writing by the policyholder or by the policyholder's authorized broker-agent. The insurance company has 10 business days to comply with this request.
Q. What happens when an employer cancels a policy during the policy year?
When an employer cancels a Workers Compensation policy in the middle of a policy year (midterm) in order to secure insurance with another company or to close a business, the insurance company will return any premium owed on a short rate basis. A short rate is an administrative penalty assessed to the policyholder for failure to complete the contracted term of insurance. An insurance company may charge a minimum premium for the cancelled policy if the short rate cancellation amount is less than the minimum premium in order to cover expenses. If an employer experiences problems with a cancellation or a premium refund issue, they can contact the CDI.
Q. What can an employer do if there is a dispute on a Workers Compensation classification code?
If an employer questions the assignment of a classification code, the broker-agent or company underwriter should be contacted for a discussion and/or explanation of the specific classification code in question. If a company underwriter changes a classification code that results in an increased premium (unless the reclassification is the result of a Department of Insurance regulation or under the authority of the Insurance Commissioner), the company must inform the employer or the broker-agent of the change in writing. If there continues to be a dispute regarding an existing or reclassified code, then the employer can file a written complaint with the Department of Insurance.
Similarly, if an employer wants to dispute a classification decision made by the Workers Compensation Rating Insurance Bureau (WCIRB), then the employer can file a written dispute with the WCIRB. If the request is rejected or not acted upon, then the employer can contact the Department of Insurance and file a written complaint.
Our application is specifically designed to provide 20+ insurance companies with a complete information about your business operations. Some questions are mandatory (Business Name, Address, Number of Employees and Payroll Information, Federal Employer Identification Number, Prior/Current Insurance Information, Loss History). Some questions are optional, but your answers to these will help us to expedite the quoting process.
Q. My spouse and I are the sole owners of our business. We have no employees. Are we required to obtain workers' compensation coverage?
Generally, coverage for sole owners is optional. You would, however, need to have workers' compensation coverage for any employee you may hire, even if it's just one employee, and even if it's just temporary employment. You should consult with your attorney, insurance agent or broker, or carrier regarding the specifics of your situation and your options.
Q. Are executive officers or directors of the company covered under its workers' compensation policy?
Generally, all employees of the company, as legally defined, including corporate officers and directors, must be included in the policy unless they are the sole owners of the firm. In the case of sole owners, they may elect not to be covered. Several sections of the Labor Code (refer to your State specific Labor Code) must be considered to answer this question. You should consult with your attorney, insurance agent or broker, or your carrier regarding the specifics of your situation.
Q. How much does workers' compensation insurance cost?
Workers' compensation insurance premium rates are not regulated by the state. Rates can vary from carrier to carrier.
Q. What determines how much I'll pay for my premiums?
A number of factors go into determining the annual premium an insurance carrier will charge. These include your industry classification, your company's past history of work related injuries (known as your experience modification), your payroll, any special underwriting adjustments such as use of a certified health care organization, and any special group or dividend programs you may be eligible for.
Q. Where do I get the claim forms I need to give my employees if they get sick or hurt because of work?
Your workers' compensation claims administrator - generally your insurance carrier or third party administrator if you are self insured and have one - provides the claim form in the quantities you need.
Q. What happens if I'm uninsured and an employee is injured?
Failing to have workers' compensation coverage is a criminal offense. If an employee gets hurt or sick because of work and you are not insured, you are responsible for paying all bills related to the injury or illness. You should be aware that workers' compensation benefits are only the exclusive remedy for injuries suffered on the job when you are properly insured. If you are illegally uninsured and an employee gets sick or hurt because of work, that employee can file a civil action against you in addition to filing a workers' compensation claim.
Q. Can I be fined for not carrying workers' compensation insurance?
Please consult your legal adviser about possible consequences you and your business can face for not carrying workers' compensation insurance.
Q. How does an employer request a Workers Compensation premium and loss history report?
Workers Compensation premium and loss history reports (commonly referred to as loss runs) must be requested in writing by the policyholder or by the policyholder's authorized broker-agent. The insurance company has 10 business days to comply with this request.
Q. What happens when an employer cancels a policy during the policy year?
When an employer cancels a Workers Compensation policy in the middle of a policy year (midterm) in order to secure insurance with another company or to close a business, the insurance company will return any premium owed on a short rate basis. A short rate is an administrative penalty assessed to the policyholder for failure to complete the contracted term of insurance. An insurance company may charge a minimum premium for the cancelled policy if the short rate cancellation amount is less than the minimum premium in order to cover expenses. If an employer experiences problems with a cancellation or a premium refund issue, they can contact the CDI.
Q. What can an employer do if there is a dispute on a Workers Compensation classification code?
If an employer questions the assignment of a classification code, the broker-agent or company underwriter should be contacted for a discussion and/or explanation of the specific classification code in question. If a company underwriter changes a classification code that results in an increased premium (unless the reclassification is the result of a Department of Insurance regulation or under the authority of the Insurance Commissioner), the company must inform the employer or the broker-agent of the change in writing. If there continues to be a dispute regarding an existing or reclassified code, then the employer can file a written complaint with the Department of Insurance.
Similarly, if an employer wants to dispute a classification decision made by the Workers Compensation Rating Insurance Bureau (WCIRB), then the employer can file a written dispute with the WCIRB. If the request is rejected or not acted upon, then the employer can contact the Department of Insurance and file a written complaint.