Workers Compensation

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  • Travelers Workers Compensation Insurance
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  • Liberty Mutual Workers Comp Insurance
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  • AmTrust

What is workers’ compensation insurance?

workers compensation insurance

Workers Compensation Insurance

Workers’ compensation insurance provides coverage for medical costs and lost wages for work-related injuries and illnesses. In most states, workers compensation insurance is required businesses that have employees.

Does your small business need workers’
compensation protection?

The answer is “yes” for nearly all businesses in the United States. You state likely mandates workers compensation insurance, so you can’t consider this coverage as optional.

Each state will have their own workers’ comp laws and regulations, and they do vary by state, but a small business typically needs a policy in place as soon as they hire their first employee. This is universally true.

Even when not required by law, a comp policy provides important protections for your business against medical expenses and employee lawsuits related to injuries that happen at the workplace.

As a business owners, you should rely on workers’ comp if an employee needs medical care or time off due to a workplace injury – or if an injured employee sues you for failing to prevent an accident.

What if you elect to not buy workers comp? Well, your business will be responsible for any medical bills and legal fees. More importantly, most states levy costly penalties for noncompliance, so workers compensation is a vital coverage to protect your business and bottom line.

Workers compensation

Workers’ comp is essential to small businesses for three reasons:

  • Your state’s regulations likely require workers’ comp coverage.
  • It protects your business from unexpected medical expenses and partial lost wages due to a workplace injury.
  • With the right policy, you can also get protection from employee lawsuits resulting from workplace injuries.

Why is workers compensation coverage

Many small businesses cannot afford to pay for unexpected medical or legal expenses associated with a workplace injury. If your business had to pay out of pocket for injuries like carpel tunnel syndrome or a broken leg, it could be financially devastating.

Without workers’ comp coverage protection, both the business owner and employees are put potentially difficult situations.

Does workers’ comp protect against employee lawsuits?

Workers comp does help with lawsuits in most states. In fact, most workers’ compensation policies include employer’s liability insurance providing additional protection for your business if an injured worker files a lawsuit against your business for not reasonably preventing a workplace accident.

If an employee sues for employment negligence, your insurance company will pay for:

  • Attorney’s fees
  • Court and legal expenses
  • Settlements or judgments

Business owners in Washington do not have employer’s liability insurance included in workers’ comp.

In these state like Washington, workers’ comp policies are purchased from a monopolistic state fund, which does not offer this for of coverage. Insurance companies sell stop gap coverage to protect you from employee lawsuits in monopolistic states.

Does workers’ compensation help cover fatal accidents?

Yes, most workers’ compensation policies include death benefits. These help a deceased employee’s loved ones pay funeral and burial costs after a fatal workplace accident.

In many instances, workers’ comp can also provide financial assistance for the deceased employee’s family.

Does workers’ compensation cover employees who
contract COVID-19?

It typically depends on where an employee contracted COVID-19 (the coronavirus).

Workers’ comp insurance protects employees from on-the-job injuries and illnesses. If an employee contracts the coronavirus while working, then this policy should provide coverage.

For example, a nurse caring for sick patients or a grocery store worker who deals directly with the public would both have a stronger claim than an office worker. Workers’ comp doesn’t cover diseases unrelated to employment.

Your state’s laws could potentially help cover costs related to COVID-19. If you think you might be eligible for a claim, contact your insurance company’s claims department.

Workers Compensation Cost

How much does workers’ compensation insurance cost?

Your work comp cost is based on a number of factors, including:

  • Employee Payroll
  • Location
  • Number of employees
  • Industry and risk factors
  • Coverage limits
  • Claims history

Workers’ compensation insurance for smaller businesses have a median cost of $47 per month. Many small businesses with just small staffs can pay as low as $35 per month, but larger companies can expect to pay more.

Where is workers’ compensation insurance
required by law?

Each state has unique laws and penalties for workers’ comp. In most states, workers’ comp is required as soon as a business hires its first employee.

Other states don’t mandate coverage until a business has two, three, four, or more employees. Texas is the lone state where business owners are never required to purchase workers’ comp.

All other states impose penalties for not carrying workers’ compensation. These can range from fines to jail time – or both.

Do self-employed business owners need
workers’ compensation insurance?

Typically not by law. States generally require businesses with employees to purchase workers’ compensation insurance.

But sole proprietors, independent contractors, and other self-employed business owners may buy this policy to fulfill the terms of a contract or to protect their income.

Most health insurance policies exclude coverage for work-related injuries and illnesses. If you carry workers’ comp as an independent contractor, your medical bills will be covered when you’re injured on the job.

Workers’ comp can also partially replace wages lost while taking time off to recover from a work-related injury.

Why do certain clients require you to carry
workers’ comp?

If you contract with your clients, they don’t want hassel of expenses that get created after workplace injuries. This is why you clients might require their contractors to carry their own business insurance, including workers compensation.

When your clients require workers comp insurance be carried by your business, they are limiting their own legal liability. When a business owner has their own insurance, they are more likely to seek payment from their own insurance (instead of the client) in the event of a workplace or project related injury.

Start a Workers Compensation Quote

You provide us your information once and we’ll shop the
market for you. It’s fast, safe and secure.

Call 877-334-7646 to speak with a business specialist.

Got Some Workers’ Compensation

Is workers’ compensation insurance required by law?

Each state sets its own regulations for workers’ comp. Most states require it as soon as you hire your first employee. Texas is the only state where it’s optional for employers to purchase workers’ comp.

In addition to differences across states, the construction industry often has separate rules from other industries. Visit our workers’ compensation state laws page to learn about the requirements in your state.

What does workers’ compensation insurance cover?

Workers’ compensation insurance helps pay for medical expenses and partial lost wages resulting from a work-related injury or illness. In the event of a fatality, it also pays death benefits. Read more about workers’ compensation coverage.

What is employers liability insurance?

The employer’s liability section of workers’ comp protects the employer from lawsuits related to an injury, such as claims that the employer’s negligence caused the injury.

Your workers’ compensation insurance includes employer’s liability insurance – unless you purchased workers’ comp from a monopolistic state fund. If so, you can add this insurance as an endorsement from a private insurer. Read more about employer’s liability insurance.

Why does worker classification matter?

The cost of workers’ compensation depends in part on the type of work done by your employees. That means you must make sure your employees are classified correctly to avoid lawsuits and penalties. Each employee must be assigned a workers’ compensation class code that accurately reflects their work environment and level of risk.

How do you buy workers
compensation insurance?

How quickly can buy workers’ compensation coverage?

Our online application for workers’ compensation insurance takes just a few minutes to complete. It requires some basic information about your business, including where it’s located, the number of employees, and your estimated annual payroll.

In most cases, we’ll deliver multiple quotes from carriers as soon directly after you finish the application. Look them over and pick the policy that works best for you. A licensed insurance agent is available to assist you throughout the process. Once you purchase a policy, you can access your account and obtain a certificate of insurance, which is a formal proof-of-insurance document.

What does workers’ compensation insurance cover?

We specializes in small business insurance for numerous industries. Our insurance specialists have helped more than 125,000 businesses, including:

Building design professionals
Cleaning service businesses
Construction and contracting businesses
Finance and accounting professionals
Food and beverage businesses
Healthcare professionals
Information technology businesses
Insurance professionals
Landscaping professionals
Media and advertising companies
Photographers and videographers
Real estate professionals
Retail businesses

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