Workers Compensation is a type of insurance that helps pay for the medical bills and lost wages of an employee who was injured or fell sick on the job.
In certain cases, it can also help cover the cost of vocational rehabilitation. In the unfortunate case that an employee dies on the job, Workers Compensation can help with funeral expenses and paying death benefits to dependents.
Tracing its roots back to the early 1900s, Workers Comp was a bi-product of the Progressive Era, spearheaded by the muckrakers. With the publicity created by the muckrakers, a group of factory workers set out to expose the dangerous conditions under which they had been forced to work, inspiring a national public outcry for change.
Commonly abbreviated as “Worker’s Comp”, most states now require employers to carry this coverage by law. At its core, Workers Compensation Insurance is designed to prevent employers from being sued by injured or ill employees for medical expenses and lost pay. In fact, most workers comp agreements require employees to relinquish their right to sue in exchange for the protection they offer.
This agreement is beneficial both to the employer and the employee as it simultaneously ensures an employee who cannot work will still be able to pay their bills and that an employer with an injured or sick employee won’t become insolvent as a result of a high-damage lawsuit.
While the specifics of how workers comp insurance works vary depending on jurisdiction and other situational factors, the basic concept typically functions as follows:
Typically, Workers’ Compensation Insurance will cover any injury resulting directly from an accident at the workplace.
Some examples of injuries that would typically be covered include:
In some cases, Workers’ Comp will even cover stress-related injuries like heart attacks and strokes. In other cases, it can also cover disease transmission (if the injured party can demonstrate they were infected as a result of negligence on the behalf of their employer).
While each Worker’s Comp claim is different, injuries or illnesses sustained as a result of employee negligence are rarely covered. Some other situations in which workers comp will not cover an employee injury include:
Workers Compensation Insurance can be written to cover a wide variety of industries and positions. That said, some states enforce restrictions on the types of employees that can legally be covered.
Some positions likely to be restricted from Workers Comp coverage by a State Board include:
Much like other types of business insurance, the cost of workers compensation coverage depends on a number of factors. Typically, businesses in each state are grouped into classes based on injury patterns and average claim costs.
Workers comp rates are calculated for each class based on the five-year average loss cost for all businesses contained within, overlaid with that State’s unique economic factors. The purpose of this classification system is to try to ensure that each class of business incurs a coverage cost that makes sense in comparison to the average risk of their operations.
Much like Tomins takes the time to learn about each business we serve to help ensure each client is getting the best coverage at the best price, the Workers Comp classification system is designed to help make sure businesses are paying the most equitable price for the coverage they need.
In some states, this system is complimented with an additional modifier known as “experience rating” whereby business owners who strive for a safe workplace and minimize claim frequency are rewarded with a lower premium cost.
If you need Workers’ Comp coverage for your business, Tomins has you covered. Rather than follow the one-size-fits-all approach of most insuretech firms, we take the time to understand the unique needs of each business we serve.
Workers Compensation Insurance from Tomins is Mindful, Modern, and straightforward—getting you all the coverages you need and none that you don’t.
Don’t settle for the NEXT best thing. Tomins—because you deserve an insurance partner who works as hard as you do.