| What is workers' compensation insurance? | | | | negligence, carelessness or failure to provide a |
| Workers' compensation insurance covers your | | | | safe working environment caused an accident or |
| employees' medical and disability expenses related | | | | injury. |
| to work-related illness and on-the-job injuries. | | | | Do I have to pay for workers' comp coverage |
| Employers' liability coverage, which is normally | | | | for myself? |
| included on a workers' comp policy, protects your | | | | In some states, owners, officers, partners and |
| company by paying legal fees and any awarded | | | | other company principals can exclude themselves |
| settlements should an employee sue you, claiming | | | | from their own companies' workers' compensation |
| that an illness or injury was caused by your | | | | coverage. If you've got good health insurance and |
| company's negligence or failure to provide a safe | | | | disability insurance policies, consider your risk low, |
| workplace. | | | | and want to save on premiums, this may be a |
| How do I know if I need workers' comp | | | | good choice for you. |
| insurance? | | | | What if I want to cancel my workers' comp |
| Workers' compensation insurance is required by | | | | policy? |
| law in most states for companies that have W2 | | | | In virtually every state, the insurance company |
| employees, and in some states for 1099 | | | | can charge and retain a minimum premium when |
| contractors. Regardless of state law, clients often | | | | a workers' compensation policy is cancelled. So, if |
| also require in their contracts that their | | | | you buy a workers' compensation policy and |
| contractors carry workers' compensation | | | | cancel it two months later, you will still owe the |
| insurance. | | | | minimum premium, which can be much more than |
| What are the workers' compensation laws for | | | | the cost of two months of coverage. In some |
| each state? | | | | states, the minimum premium can run from |
| It's important to know your employer rights as | | | | several hundred dollars to more than $1,000. So, |
| well as the laws governing workers' comp in your | | | | read the fine print before you decide to cancel |
| state. Workman's comp is regulated by each | | | | your workers' compensation policy, and be sure it |
| state's department of industrial relations, | | | | will actually save you money. |
| department of labor, department of insurance, | | | | What's a premium audit? |
| department of employment, bureau of workers' | | | | Your workers' compensation premium depends on |
| compensation, or a similar state agency. | | | | the number of people you employ and what risk |
| TechInsurance provides links to each state's | | | | classifications those employees fall into, based on |
| insurance web site for quick access to detailed | | | | each person's scope of employment. To |
| information about workman's compensation laws. | | | | determine these numbers, your carrier will |
| Do I have to carry workers' compensation | | | | conduct an annual premium audit and set your |
| insurance if I don't have employees? | | | | company's workers' compensation insurance |
| If you have a one-person company, you may be | | | | premium for the policy period accordingly. It is |
| operating in a state that does not require that | | | | important to note that during the audit period, the |
| you maintain workers' compensation coverage. | | | | carrier may adjust the premiums and findings |
| However, your client may still require that you | | | | from current period and make that adjustment |
| carry workers' compensation insurance. Why? In | | | | retroactive to cover the employees and risk |
| many states, unless a company can show that | | | | classifications that were incurred during your |
| subcontractors carry their own workers' | | | | previous policy period. |
| compensation insurance, subcontractors will be | | | | What can I do to minimize my premium? |
| automatically covered under the hiring company's | | | | Audit mistakes can cause you to lose coverage |
| policy, at the hiring company's expense. | | | | or can unnecessarily inflate your company's |
| Do I still need workers' comp insurance if I use | | | | workers' compensation insurance premium, so it's |
| contractors instead of employees? | | | | important to prepare. Designate a knowledgeable |
| Contract employees, leased employees and some | | | | contact person for the auditor who is familiar with |
| other work-for-hire situations may be exempt | | | | your employees' work. Be sure to provide |
| from workman's comp insurance requirements, | | | | accurate and detailed information, because without |
| but some state laws do require companies to | | | | it, the auditor may assume the worst-case |
| cover 1099 contractors. When you hire | | | | scenario for risk exposure and increase your |
| independent contractors to do work for you, you | | | | premium. Review your payroll documents to |
| should require that they carry their own workers' | | | | make sure that they will allow the auditor to |
| compensation, or assume that you will have to | | | | readily break out overtime pay and discount it |
| pay additional premium to cover the | | | | back to straight time, as is allowed in most (but |
| subcontractor on your own policy. | | | | not all) states' workers' compensation rules. Your |
| My state requires me to carry workers' | | | | payroll records should also reflect the actual hours |
| compensation insurance, and so do my clients. But | | | | spent by each employee in each of the different |
| what's in it for me? | | | | workplace exposure categories. Otherwise, all of |
| Workers' comp insurance medical benefits pay for | | | | the employee's payroll will go into the most |
| doctor's visits, medication, diagnostic tests, | | | | expensive classification applicable. If your company |
| therapy or hospital stays that are directly related | | | | uses 1099 subcontractors, show the certificates |
| to an accident or injury that occurred while the | | | | of insurance documenting that they have their |
| employee was on the job. Additionally, the policy | | | | own workers' compensation insurance. |
| will reimburse the employee for a portion of | | | | What if I have employees in multiple states? (OK, |
| income lost due to work-related injury or illness. If | | | | make that Top 11 Questions.) |
| the worst should happen and an employee is killed | | | | It is very important to break down your payroll |
| on the job, the insurance will pay death benefits | | | | by state. If you do not provide the insurance |
| to the survivors, as well as some funeral | | | | company with accurate information about payroll |
| expenses. So, if your employee is hurt on the job | | | | you have in each state where work is done, the |
| and you have workers' comp coverage, you | | | | insurance company will very likely not pay claims |
| won't have to worry about paying those costs | | | | that occur in unreported states, even if the total |
| out of pocket. | | | | payroll on your report is accurate. Be sure the |
| There's another important benefit for you as an | | | | person handling the audit in your office is aware |
| employer: The employment liability coverage | | | | of and has access to accurate information on |
| included with your workers' comp policy protects | | | | out-of-state payroll, and that the audit is fully |
| you from paying high lawyer fees or big | | | | completed. |
| settlements if an employee claims that your | | | | |