Cost of workers' insurance

Cost of workers’ insurance, what is the claims process, and other details

Like large businesses, smaller ones are also required by law to provide insurance coverage to their workers. While the specific rules might vary from state to state, most have made it mandatory for small companies to provide workers’ compensation.

But why should you have small business insurance? The answer is obvious. Medical expenses, rehabilitation costs, and lost wages will be covered by the insurance company if an accident occurs at work. It also saves you the risk of facing a lawsuit from the injured employee or their family.

Not having insurance also deters clients as they prefer working with companies with insurance. Providing coverage for your workers cements your reputation as a company that takes its employees’ safety seriously.

How much does an insurance cost, how does the process work, and what areas does it cover? Get the answers to those questions below.

What is the cost of workers’ insurance?

The exact cost of the workers’ comp depends on various factors like the business payroll, operational history, and which industry it belongs to.

For example, your small-sized business could belong to general retail, hospitality, food, and beverage manufacturing, financial services, and educational services. The more potential for hazards your business has, the higher the risk your employees face, regardless of the scale of the business operations.

Most insurers take into consideration your company’s gross payroll to calculate the premium account, including things like bonuses, stock, commissions, salaries, wages, PTO, etc.

How does the claims process work?

Immediately after an injury, you should see that the employee receives prompt medical treatment. If the policy requires the worker to receive treatment from a particular doctor for its benefits, you should inform them in advance.

Employers should also ensure that the employees notify them immediately after the accident, describing the incident in detail. Even if a worker feels fine after an accident, it is better to report the accident, as that would qualify them for compensation if they experience its effects later.

After the worker notifies you, you should provide them with a claims form containing vital details like the nature of the injury, what caused it to occur, and the type of medical treatment required.

Once the employees fill out the form, the employer submits it to their insurance provider or the State Workers’ Compensation Board. The insurer receives the necessary medical documents from the doctor, reviews the claim, and notifies the employer about whether or not they have approved it.

Does a claim affect the business?

As a small business, the impact of an employee’s accident at work is likely to be higher, costing you both monetarily and otherwise. For instance, payment for workers’ insurance is likely to increase the premium you pay to the insurer.

It would also affect the employees’ productivity and perhaps lower their morale. You might have to bear the expenses of replacing the machinery or equipment damaged by accident. It could also impact your reputation and put a blot on your safety record.

However, you can prevent this by creating a safe workplace, ensuring equipment safety, promptly addressing safety concerns, and investing in a solid compensation plan.

Tips on choosing an insurance provider

You should try opting for insurance providers trusted by small companies who have previously worked with them. It is better to ask them about their fees beforehand, which areas their insurance covers and excludes, do they have a month-to-month payment system, and their general policies.

You should consider buying small business insurance from a provider who has experience working with companies of this scale in the past. It protects your company from lawsuits and saves you from incurring treatment costs.

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