Workers’ compensation is a vital part of any business. No matter what type of business you are running. Whether it be a plant or manufacturing industry, or an office-based business, ensuring that you are fully covered is key to lowering your long-term risk.
But, if you are just starting out, and looking for the right insurance for your company, how do you go about it? We took a look at the key elements of workers comp insurance, and what you need to consider for your company. Remember, every company is unique, but, every company absolutely does need to be covered. So, let’s jump into what you need to consider.
Table of Contents
Know What Your Requirements Are
The first thing to look at is the status of your business. What are your requirements? If you have an office-based setup, you are going to need less coverage than those in a factory, or construction company, for example. So, it is important to do your due diligence. You will need to know how many workers you have, what risks they are exposed to and the likelihood of something happening.
A full risk analysis is a great idea to kick off your workers’ compensation journey. A walk-through of your company may reveal underlying risks that you may not consider initially. So, be as thorough and comprehensive as possible.
Get a Good Agent On Your Side
The next step will be to bring in some help. As thorough as you may be with your initial risk assessment, you will want a professional to assist you to get the right cover based on your risks. Not only will they be able to see things that you don’t, but they will be able to accurately match costs and values to the risks.
The trick here is to get a reliable agent on your side. You will need to look for a brokerage that has had extensive experience in the industry and a good customer base. There are hundreds of agencies that are not fully authorized to practice. In this case, you may find yourself severely undervalued or not covered at all. So, when choosing your broker, do your due diligence and find someone who comes recommended by other companies, especially in your field.
Know the Ins and Outs of the Policy
It is important to know what your policy is going to cover and what is being omitted from the policy. You will also need to know the different aspects of workers’ comp insurance. They are usually divided into two parts. Workers’ compensation covers your employees from bodily injury if they are involved in an accident while in the course and scope of your employment.
Aside from that, it also covers any injuries or diseases that may occur or may have been aggravated by the conditions of the employment. So, if your employees start falling ill due to exposure to something in the workplace, for example, workers’ insurance comp will cover this. It is important for you to know though, that workers’ comp insurance doesn’t cover injury that results from employee criminal activity, illicit drug use, self-inflicted wounds or suicide.
Know How Much You Will Pay
Again, the costs of insurance will be determined by various aspects of your business. Once you start figuring out your risks and the likelihood of your risks, you will start figuring out what your monthly contributions will be. Again here, getting a good broker on your side is important. Their fees will be included, but you will want someone who is fair. Some agents are on the market to vastly increase costs and to line their pockets.
You will be paying monthly contributions based on various elements of your business. These include:
- The location of where your team is working. Some might work in the same state, while some businesses have teams working in various states and even different companies;
- The number of staff on your payroll and the estimated payroll amount;
- The industry that you are in and the risks associated with the industry;
- The type of tasks done by your team and their exposure to various risks;
- Your credit score and claims history.
The Bottom Line
In order to avoid paying out, you will need to do several things to secure your employees. If you are working in a high-risk environment, it is crucial to have safety plans in place. Prevention is better than cure, so have measures in place to protect your staff from the outset. This can be relevant in office-based environments too, where there is less risk. Having workplace guidelines and safety manuals are vital. Lastly, keep reviewing your policy. The trick to insurance is to keep it as up-to-date as possible at all times.