What is Workers Compensation Insurance

All employers must provide Workers’ Compensation benefits to their employees under the State Labor Code. If a business employs one or more employees, then it must carry workers compensation insurance. Read More

Workers’ compensation is an insurance program paid by the employer that provides compensation to employees who suffer job-related injuries and illnesses.
Injured at work employees can get workers’ compensation benefits regardless of who was at fault — the employee, the employer, a coworker, a customer, or some other third party.
Workers Compensation Benefits.

Workers Compensation Insurance Policy Coverage Highlights

Depending on the circumstances of the injury or illness, injured workers are entitled to specific benefits as structured by Workers Compensation insurance. There are 6 basic types of Workers Compensation benefits:

  • medical care;
  • temporary disability benefits;
  • permanent disability benefits;
  • vocational rehabilitation services;
  • supplemental job displacement benefits;
  • death benefits.

Injured workers may be entitled to one or more of these benefits.

Why purchase Workers Compensation Insurance

Employers who fail to purchase Workers Compensation insurance are in violation of the State Labor Code. Your business may be shut down when discovered you and your employees are uninsured for workers compensation. In addition to all monetary fines for failure to carry Workers Compensation insurance you would also pay a fine of $1,000 per employee.

How is Workers Compensation Premium Calculated

An employer’s premium is calculated twice during the period of the insurance policy. The initial premium or premium estimate is calculated at the beginning of the policy period. It is based on an estimate of wages that an employer is likely to pay during the policy period. The final premium is calculated at the end of the policy period during the audit. It is calculated using the actual amount of wages paid by the employer during the policy period. If the audited premium is higher than the initial premium, the employer will need to pay the difference to the insurance company. If the audited premium is lower than the initial premium, the insurance company will reimburse the employer any overpayment.

Workers’ Compensation Rules

Your state insurance website has all the information regarding worker’s compensation rules and requirements. Search on google for workers compensation insurance bureau.

How Much Does Workers Compensation Insurance Cost

The premium generally starts at $400 per year for those whose annual payroll is low and whose employees perform low risk duties, such as clericals, salespeople, and programmers. Also such premium depends on prior loss history and current experience modification rate. All businesses can take certain steps to lower the chance of a workers compensation insurance claim:

  • Check the driving record of your employees;
  • Provide employees with ergonomic workstations;
  • Maintain your facilities and equipment;
  • Conduct safety meetings;
  • If applicable, equip your machines with safety guards
  • Get safety tips for your business from insurance company.

Why purchase Workers Compensation Insurance

Employers who fail to purchase Workers Compensation insurance are in violation of the State Labor Code. Your business may be shut down when discovered you and your employees are uninsured for workers compensation. In addition to all monetary fines for failure to carry Workers Compensation insurance you would also pay a fine of $1,000 per employee.

How is Workers Compensation Premium Calculated

An employer’s premium is calculated twice during the period of the insurance policy. The initial premium or premium estimate is calculated at the beginning of the policy period. It is based on an estimate of wages that an employer is likely to pay during the policy period. The final premium is calculated at the end of the policy period during the audit. It is calculated using the actual amount of wages paid by the employer during the policy period. If the audited premium is higher than the initial premium, the employer will need to pay the difference to the insurance company. If the audited premium is lower than the initial premium, the insurance company will reimburse the employer any overpayment.

Workers’ Compensation Rules

Your state insurance website has all the information regarding worker’s compensation rules and requirements. Search on google for workers compensation insurance bureau.

Frequently Asked Questions about Audits

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