The 5 Most Important Things To Know About Workers Compensation
Business owners who are in the process of obtaining workers compensation insurance may already know a thing or two, but there are a number of other key factoids that a business owner needs to be aware of before making a final decision regarding their eventual purchase.
Providing a safe work environment for your employees should be the paramount concern and business owners who are on the verge of purchasing workers compensation coverage would do well to read on and learn more.
1. Coverage Is Mandated In Most States
Be sure to investigate the workers compensation laws in your state to find out more about your local mandates. In most instances, a business is required by law to purchase adequate coverage for their workers and when a business owner attempts to skirt these regulations, they can receive hefty fines and numerous penalties. However, there are instances where you are not required to purchase coverage until you have a certain amount of employees, so be sure to do your research.
2. Costs Vary By Location
Do not make the common mistake of consulting with a friend or colleague in another state or region to compare notes. Costs tend to vary greatly by location and the minimum amount that is required by each state is different. Knowing the rate trends and all of the factors that will influence your premiums in the future will help you immensely during the purchase process.
3. Worker Classification Matters
It's no secret that no business owners wants to pay for more their workers compensation policy than necessary, which is why it is important to classify your workers properly. For example, if you are making the mistake of classifying all of your employees under the most dangerous category in your chosen industry, you may cause your premium rates to spike in an unwanted manner.
4. Keeping Lawsuits At Bay
One of the primary reasons for obtaining a workers compensation policy is keeping potential lawsuits at bay. Gone are the days when cases were stacked against the proletariat and employers are now held responsible for the injuries that they cause. By establishing the correct policy, you are able to provide an injured worker with the proper settlement and keep them from successfully suing you on multiple occasions for the same exact injury.
5. Workplace Safety Is Crucial
In order to avoid having to pay out a massive settlement to an injured worker, you'll need to make sure that your workplace has put the proper safety codes in place. The premium that you are required to pay each month depends on the following factors: your history of workplace injuries, the level of safety provided and the nature of the work that is being done. When you keep claims to a minimum, you reduce your monthly premiums.