Worker’s Compensation—Protecting You and Your Employees
Your employees are the backbone of your operation. But if one of them gets injured on the job or suffers from a work-related illness, not only does your business suffer, but your employee does as well. That’s why in many states, employers are required to carry workers compensation insurance—often called workers comp.
Workers comp protects your employees by providing compensation benefits if they cannot work due to an on-the-job injury or illness, no matter who is at fault. In exchange for the guaranteed benefits, the employee withdraws the right to sue the employer to compensate for the injury or illness.
If your employee files a workers comp claim, the benefits they receive may include:
- Temporary total disability—time loss compensation: This includes a percentage of the employee’s wages at the date of injury.
- Loss of earning power. Not available in all states, these benefits are paid to employees who return to work after an illness/injury, in a different, lower-paying position. Through Worker’s Comp, the employer pays the employee the difference between the higher and lower pay.
- Medical bills. The employee’s medical bills as a result of the illness/injury are paid as they are incurred.
- Total and permanent disability—pension. This is awarded to an employee who is totally and permanently disabled because of their illness/injury.
It’s a Matter of Law
Because many states mandate an employer must carry workers comp insurance, there are serious consequences imposed on those that don’t, including:
- Criminal prosecution
- Personal liability for a workers compensation benefits
This, in turn, releases the employee from their obligation to not pursue litigation, allowing them to sue the employer directly in court.
Calculating the Cost
Calculating the cost of workers comp to cover your business and employees can be tricky. The rates are subject to a variety of factors, including:
- Type of business and jobs performed: Certain jobs present more hazards and risks than others. A clerical worker is going to be at lower risk for a claim than someone who works road construction. However, if the clerical worker is employed in a nuclear power plant, they may be at higher risk for injury or illness than a clerical worker at an accounting firm.
- Experience modification rate (MOD): Every business has a MOD, which represents your claim history. The more workers comp claims in your history, the higher your MOD number. Prioritizing safety in your workplace can go a long way toward keeping this number low.
- Payroll: The amount your business issues in payroll will also factor into the equation.
Carrying Workers Comp Is Just Good Business—Call Today
At the Thomas Ward Insurance Group, we understand the complexities of workers comp. We’re here to help you understand the insurance and what you need to cover your business. After all, protecting the health and well-being of your employees is just good business for both you and them. Call 312.254.1500 today to get a quote or contact us online learn more.