Understanding Workers Compensation Coverage

Understanding Workers Compensation Coverage

Employers are generally required to carry workers compensation insurance for their employees, and those premiums can add a substantial amount to your recurring expenses. While some aspects of the policy are mandated, you do have some control over insurance coverage and costs. Understanding coverage options and what affects premiums is important to properly manage your policy. 

What Workers Comp Covers

Coverage can vary depending on where your business and workers are located, so it is crucial that you know what your policy does and does not cover. In most cases, a worker’s compensation policy will pay for medical expenses for treatment and rehabilitation after a workplace injury or accident as well as a portion of lost wages while the employee is recovering. 

Additional Coverage Options

Replacing lost wages isn’t the only consideration if a worker is injured. There is also the risk of a lawsuit against your company. Adding additional liability coverage, such as with a stop-gap policy, can help protect you from these additional expenses.   

How Premiums Are Calculated

Risk factors in your industry, which are largely out of your control, will have a substantial influence on premium prices. However, there are some things you can better manage to keep costs down. For example, improving job-site safety reduces accidents and the number of claims filed, which can directly translate into lower insurance premiums for your business.

Understanding your existing coverage and business needs can help you keep workers’ comp premiums manageable.