There is nothing worse for a business than an accident at your workplace that results in an employee injury. Not only are you concerned for your worker’s health, but you’re also worried about the liability and financial consequences for your business. This scenario is why workers compensation insurance is so important for your business. If you want to learn how to lower your workers compensation cost, read our comprehensive guide to save money.
What Is Workers Compensation Insurance?
Workers compensation insurance, aka workman’s comp, is an insurance that provides benefits to employees in the case of a work-related accident. Workers compensation is based on a no-fault system; simply put, it means your employees give up their right to sue you, their employer.
Why Have Workers Compensation Insurance?
Most states will require you to have workers compensation insurance, either through an insurance advisor or from a state fund. More importantly, however, if one of your workers is injured on the job, they can sue you for damages. Workers compensation insurance gives your employees the assistance they need and the protection you want for your business.
Do I Need Workers Compensation Insurance?
If your business employs three or more workers, you will most likely be required to have workers compensation insurance. If you have two or fewer employees, you may be able to opt out of purchasing it. However, remember that you could be leaving your business open to serious financial liability if one of your employees suffers an injury at your workplace.
Do I Need Workers Compensation Insurance for a Sole Proprietor?
Sole proprietors are not usually required to purchase workers compensation insurance. But if you would like the extra protection in case you are injured on the job, there are specialty sole proprietor workers compensation policies that replace wages and help pay medical expenses while you are unable to work.
Is Employers Liability Insurance the Same As Workers Compensation?
No. While employers liability insurance is usually bundled with workers compensation insurance, they cover different areas in the case of a workplace accident. Employers liability insurance protects your business from litigation arising from claims of negligence, where workers compensation insurance pays the employee for lost wages and any medical expenses due to an accident.
Who Is Exempt From Workers Compensation Insurance In Florida?
In Florida, a member of a limited liability company (LLC) or a corporate officer can exempt themselves from workers compensation insurance requirements. To file an exemption, the LLC member or officer will file a Notice of Election to be Exempt application with the Florida Division of Workers’ Compensation.
Who Pays for Workers Compensation Insurance Coverage?
Unlike insurance benefits you offer your employees, your workers will not be paying any payroll deductions for workers compensation insurance. The employer will always pay for the workers compensation policy, regardless of what state they operate in.
When to Get Workers Compensation Insurance
In most states, you will need to purchase workers compensation insurance as soon as you hire a new employee. If your employee has an accident before your policy becomes active, your business will be vulnerable to liability and lawsuits. The sooner you purchase workers compensation insurance for your worker, the better.
How Much Does It Cost to Get Workers Compensation Insurance?
How much you pay for your workers compensation insurance will depend on how many employees work at your business, how many claims have been filed, how many days of work employees have missed due to accidents, and other factors. Smaller businesses can expect to pay about $2,000 to $3,000 in premiums per year.
How to Lower Workers Compensation Cost: Five Easy Steps
- Upgrade your business’s safety practices and equipment regularly.
- Take note and follow workers compensation claims management best practices.
- Speak with an experienced insurance advisor who can help lower your premium.
- Incentivize new employees to follow current safety procedures to reduce accidents.
- Update or create an injury procedure for your business.
Saving money on your workers compensation insurance premiums is easy for most businesses. Emphasizing workplace safety with your employees and keeping your safety equipment updated will go a long way to reducing workplace accidents and lower your premium costs.
The insurance advisors at JAISIN can help work with you to see if your current workers compensation policy is the best for your business, or if there are better policies out there that can reduce your premium. Commercial insurance advisors have experience with small, medium, and large businesses, and understand exactly what your company needs to be fully protected.