Workers' Compensation Insurance - What Employers Should Know

All U.S. employers, with very limited exceptions, are required to purchase Workers' Compensation insurance. This state-regulated insurance provides state mandated medical and lost wage benefits to employees injured during the course and scope of their employment.

 Exceptions to purchasing this mandatory insurance include very small companies that do not meet the number of employees requirement, or in some cases, very large companies that prefer to self-insure this risk.

 An employer's failure to comply with a state's requirements will trigger economic penalties and possible criminal prosecution.  A variety of Workers' Compensation insurance programs are available from the employer's risk finance perspective.

Exclusive Remedy & Employers' Liability

Although each state's regulations differ, they all share a common purpose. They provide an "exclusive remedy" in the form of a "no-fault" program for compensating employees in the form of medical benefits and lost wages in connection with injuries that arise in the course and scope of their employment.

While Workers' Compensation insurance responds to the "no-fault" consequences of workplace injury, Employers' Liability insurance, which is typically joined with Workers' Compensation policies, provides coverage for common law claims against the employer by the employee, their family or third-parties, if the claimant or plaintiff can meet the legal standard in their jurisdiction for establishing that the injury was caused by the employer's negligence, gross negligence, recklessness or willful conduct.

The Broad Landscape of Special Funds and State Programs

Many states provide special funds to pay workers' compensation benefits to injured workers employed by companies that failed to purchase insurance. Assigned risk pools or insurers of last resort are also available for employers that commercial insurers consider too risky.

Insurance Premium Calculation - The Loss Experience Mod Factor

This is a complex and often misunderstood concept that has a major effect upon a company's Workers' Compensation insurance premiums. On a general level, it is essentially a comparative analysis of your company's Workers' Compensation loss history for the prior three years against companies within the same or similar industries.

The standard Experience Mod, which is explained below, is calculated by the National Council on Compensation Insurance (NCCI). Employees are classified by standard identification codes depending upon their occupation. Depending upon an employer's size and diversity of operations, many classification codes may be involved in the analysis.

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General Liability Insurance: Don't Leave Your Business Unguarded

Protecting a business against lawsuits and claims of damages by getting it insured is common sense. The general liability insurances are usually the basic type of insurance required by states or countries from businesses because they help both businesses and the customers if ever there are lawsuits.

What is general liability insurance and how can it help your business?

When a business is attacked by a lawsuit that may result to payment for damages, the general liability insurance helps by shouldering the payments that is due to the claimant. This type of insurance protects the business from financial losses of this nature and it may even prevent bankruptcy of small businesses.

A claim must be filed by the business owner stating what happened and claiming that the incident is covered by the insurance policy. The insurance company will conduct their own investigation about the claim and if the claim is found to be true, the third party will be paid according to the calculations by assessors on the value lost because of the damage caused by the policy holder.

There are many circumstances where the workers compensation insurance can be very convenient against claims by customers or even rival businesses. Injuries due to a company's services or injuries because of the physical plant of a business establishment is a very good example of a claim from a third party. If one customer burned his or her tongue in because of the hot French fries your restaurant served, the claimant could claim that there were no warning signs that the fries were hot and it was negligent on your part not to place any warning signs.

In this case, if the court indeed finds your establishment guilty of unknowingly causing the damage towards the claimant, you will be required to pay for the damages that were incurred. There could be a lot of payments depending on the number of faults in your business establishment's part. It is possible that a large chunk of your business' bankroll may be taken because of the lawsuit if you are not covered by general liability insurance.

Your company will be able to continue with its service and production because your funds will not be bothered by lawsuit payments if you have coverage of a workers compensation insurance plan. If you are interested in getting insured with this type of coverage, you can get a General Liability Insurance Quote from your trusted insurance company.

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