Do you know how many workplace injuries cost companies? A whopping $1 billion every week. Work-related injuries and fatalities can devastate a business regardless of size.
As a small business, we understand that you are possibly overwhelmed by the number of insurance policies you need, but workers’ comp policy is one you should have as soon as you hire employees. With over 12,000 work injuries daily, some states have made workers’ compensation mandatory.
The question is, how do you find the right workers’ comp policy for your business?
Choosing the right insurance policy may seem like a daunting task. How do you know which one will cover all cases for your kind of business?
In this post, we’ll guide you through the factors you need to consider when choosing a workers’ comp policy and help you make the right decision.
Here are some factors for you to consider so you can make informed decisions.
Finding a Great Broker
Having a great insurance broker, or agent, will help you navigate these policies according to the laws and requirements of your state. It’s advisable to hire an agent that’s well versed in your industry so they can help you make the right decisions. They should also understand the workers’ compensation regulations in your jurisdiction to help you lower your insurance premiums.
Look to make a lasting relationship with your agent. In the future, you’ll know who to talk to when you have issues to handle. This means that during a crisis, you’ll have someone who understands your business and your industry ready to help you out.
What Are Your State’s Requirements?
Workers’ comp requirements vary from state, and it’s imperative for you to understand what your state mandates.
Do you have some of your employees working in multiple states? If so, your agent should be well versed in the laws governing all states in this regard. Different states may have various benefits for injured employees, so ensure you understand all regulations.
If you do have business branches in different states, you can get cross-state coverage policies. This coverage allows you to extend your worker’s comp policy as long as you provide a 30-day notification.
Some states are monopolistic, though, and don’t have the stop-gap coverage protection. This means employees can sue your business for work-related injuries and illnesses.
Is It Scalable?
Before you sign up for the policy, find out whether it’s scalable. You see, when you apply for your policy, you might have just a few employees in your business. However, your business is bound to grow, and the policy should be able to accommodate your needs, whether you have a stable growth or a sudden increase.
An ideal policy is one that gets cheaper as the number of employees increases, and not more expensive. It will also help a great deal if it scales with the business once you grow from local to national and international.
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Is It Relative to Your Industry?
Different industries come with different sets of risks and vulnerabilities. There are generic policies out there that work well for standard offices, but specific sectors will need better options.
What’s your industry? How much risk is expected? Construction workers and manufacturers, for instance, are at a very high risk of sustaining injuries and fatalities.
These workers need a more comprehensive compensation policy than the standard office. Consult with the insurance agent about what business owners in your industry are using and help you customize your policy accordingly.
Does It Cover Self Employed Workers?
You’ll find that sole proprietors, partners, and independent contractors are not covered by workers’ compensation automatically. They also need self employed workers comp to cover the owner of the business as personal coverage.
Apart from medical bills and lost wages, self-employed people can also apply for wage replacement, which covers lost wages and lost revenue. If you are self-employed, you can get a workers’ compensation policy for yourself.
Are Payments Relative to Your Industry?
The payments should also be relative to your business. If you don’t work in the high-risk industries, then you should not pay high premiums. If you have a standard workplace with minimal risks, you don’t need to be paying for hazardous waste since you’re not dealing with it.
As long as you provide your agent with a thorough overview of your business, they should be able to ensure you don’t pay for extras that you will never use.
Does It Protect You From Lawsuits?
Your workers’ comp policy is meant to protect business employees, but it should also protect you, as the employer, from lawsuits. You need to have a lawyer go through the insurance policy before you sign anything because lawsuits can cause serious harm to your business.
A lawyer will go through the contract to ensure that your business is not vulnerable and help you determine whether you’ll be prone to penalties if an employee makes a claim.
Are the Payment Options Flexible?
Once you get a workers’ comp policy, you have to pay for premiums. Check your payment options, which could be annual, or pay-as-you-go. With the pay-as-you-go option, you get to make monthly installments, which can be an ideal option if you’re running a small business.
Implement Safety Plans
Depending on your type of business, having safety plans in the workplace could save you some money, and all the trouble that comes with a claim.
Some states also offer discounts to businesses that take safety precautions to prevent injuries and fatalities. To qualify, you can provide workers with safety gear, or provide mandatory safety training.
Workers’ Comp Policy Is a Must-Have for Any Business
Having an effective workers’ comp policy will protect your workers, and essentially, your business. It’ll give you peace of mind as the business owner, knowing that you’re safe from expensive lawsuits and fines. That said, you should also ensure that your workers are working in a safe environment with minimal chances of getting into accidents.
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