Top Questions about Workers’ Compensation
Q&A with Jim Concannon
President, CEO & Owner
When it comes to running a business, your employees are undoubtedly the core of your operation, which is why it is vital to protect them -- and your business -- with the right insurance coverage.
In light of COVID-19, new questions about working from home and protecting employees and businesses have come up, so we are taking a closer look at some things you may want to consider in this new era.
Q: What is workers’ compensation?
Workers’ compensation is a type of business insurance that protects both the business and its employees who could experience work-related injuries or illnesses.
While workers’ compensation benefits vary by state, they typically help:
To cover employee illnesses and workplace injuries, including medical expenses and lost wages if the employee’s injury requires recovery time;
Ergonomic accommodations when your employee returns to work;
Disability benefits, if applicable;
To stay compliant with state regulations; and
To insure your business for lawsuits.
Q: What is a standard size workers compensation policy?
There is not a one-size-fits-all policy since workers’ compensation insurance is based on a few factors, including individual company risks, your company’s size, the type of work your employees perform, your claims history and your state’s laws.
Premiums are calculated based on exposure x rate. Generally speaking, the rates are usually set, and the “exposure” in this formula is the payroll, so workers’ compensation is based on how much payroll a company has.
For consultants and independent contractors, large companies often mandate certain policy limits to mitigate any risk exposure.
Q: How can I protect my work-from-home employees & business?
It is important to talk with your insurance agent about liability coverage that applies to your unique situation.
In general, we advise our clients to ensure their employees’ homes are safe for business before they begin working, and that they comply with your current health and safety policies. We also suggest having the employees designate a “work area” to minimize the likelihood of injury claims, and suggest that they take photos of their office space to ensure it is compliant.
Your employees should also check their homeowner’s insurance (and provide the employer with documentation) to protect him or her against damage done during work hours.
Another thing to consider is your cybersecurity. Ensure your IT department is equipping your employees with a secure connection so your business is not exposed to any cyber threats.
Q: Are there other considerations I need to take for my (now) home-based employees?
Yes, a big and recent change in remote working is that an employer needs to list every work-from-home location on his/her policy (i.e., all employees’ home addresses), so that your employees are classified in the proper state. There are many implications for this; if an employee lives across a state border, the rate for workers’ compensation per employee could vary.
It may be wise to add coverage to your business insurance policy to protect your company’s property (e.g., work laptops), too. Just keep in mind that your policy may not cover damages if they occur in the employee’s home, since many insurance plans only cover a particular place of business.
There are several other factors and liabilities that a business should consider as more and more employers are permitting their teams to work from home. We can help; contact us to discuss your specific questions.
Q: What are some factors that contribute to my insurance rates increasing?
The insurance market is very dynamic and depends on many factors. Common reasons for rate increases range from fluctuation in the stock market, underwriter profitability and interest rate changes.
In an ever-changing world, we are your ally in identifying the best coverage and cost-savings to protect both your business and your employees. Contact us to discuss your specific needs and how we can tailor coverage to your business and industry.
