What is workers' compensation and how does it work?
Workers' compensation is insurance that provides benefits to most types of employees who are injured on the job. These benefits can address medical care, retraining, lost income or compensation for permanent disability. Insured benefits also can go to survivors if a worker is killed. The ability to transfer disbursements means workers' compensation coverage can function similarly to other types of insurance, such as health, disability or life insurance – but it doesn’t replace these policies.
Workers' compensation provides payments regardless of who is at fault. The compromise of workers’ compensation means that, in exchange for this “no fault” environment, employees generally waive their right to litigation. In these situations, workers' compensation helps ensure businesses won't be financially crippled by costly disputes, but can still address and correct the issue at hand. Providing workers' compensation does not always guarantee an employee won't sue for injuries sustained on the job, however, because there are specific instances that permit a worker bringing his or her case to court.
Workers' compensation for the general public is state mandated, meaning that every state has its own laws and programs for this coverage. It’s a good idea to check the regulations for your specific area by visiting the U.S. Department of Labor's State Workers' Compensation Officials webpage and clicking through to your state's site.
Importantly, most states explicitly prohibit employers from firing workers who plan to make a workers' compensation claim, and employers cannot tell workers not to file. Employers who use these types of intimidation tactics typically are trying to protect their reputation or keep their insurance costs from rising, but this should strictly be avoided.
How do I get workers' compensation for my business?
From an owner's perspective, the first step related to workers' compensation coverage is to check state regulations. Based on state laws, the type of business you have and how many workers you employ, you might not even need a policy. Assuming you do, your next move is to find a provider. State agencies may provide coverage alone, but many states allow coverage from private insurers, too. If you use a private insurer, make sure it has demonstrated experience in workers' compensation coverage, like AmTrust does.
What does workers' compensation cover?
The main purpose of workers' compensation is to address legitimate workplace accidents and carelessness. This includes incidents that occur off the employer's premises but in the service of the job, such as an injuries sustained while traveling for work. It can cover both short- and long-term issues, like falling off a ladder or acquired carpal tunnel syndrome. Thus, workers' compensation protects employees in a broad range of situations.
While workers’ compensation is no-fault, certain claims generally are not covered, including when:
- A worker intentionally inflicts his or her own injuries or illnesses.
- The injury or illness occurs while the worker is doing something illegal.
- The employee wasn't on the clock.
- The worker's behavior was in clear violation of company policy or protocol.
- The employee was under the influence of drugs or alcohol.
- The injury occurs after an individual is laid off or terminated.
How much does it cost to get workers' compensation insurance?
Workers' compensation is calculated in relation to payroll. Even so, workers' compensation costs can vary considerably based on location and the specific occupation you're looking to cover. Occupations that have a high risk will naturally be more expensive to insure than occupations where risk is minimal.
It’s important to always make sure you're compliant with state regulations, as failure to meet requirements can translate to state-based penalties, too. Despite the final total costs associated with your workers' compensation policy, having one in place can save you significant money in the long run and make it easier to manage profits and losses by reducing your out-of-pocket financial liability in the event of an employee injury.
What is Experience Modification?
An Experience Modification is a calculation that compares your business against other similar types of businesses. The calculation that is produced looks at the claims your business incurred and measures that, yielding a modification factor. This factor, which is produced by a bureau independent of all insurance carriers, will either work as a debit (if you had more claims), or a credit (if you had fewer). This will then increase or lessen the premium you pay. Certain businesses below a certain size are exempt and do not receive a modification factor.
Why choose AmTrust for workers’ compensation?
As the third largest writer of workers' compensation in the United States with an "A" (Excellent) rating by A. M. Best, AmTrust always seeks to deliver superior service at a rate that's both fair and affordable. With a variety of tools and resources at our disposal, we can provide you with a quote quickly and easily. We can even write your policy for completely new ventures that fit emerging demands in the market. AmTrust and our agents recognize the importance of flexibility in today's business environment. We work close with the small and mid-sized businesses we insure to design the specific packages they need to comply and succeed, and we offer advanced reporting, monitoring and audit options so you can always see how your AmTrust policy is performing for you.