Workers’ compensation, sometimes known as workman's comp, insurance is a coverage that serves two purposes. First, the coverage protects workers on the job. If an employee is injured while working for an employer, workers’ compensation coverage kicks in and provides compensation for a certain portion of the income they will lose due to being unable to work when injured. The coverage is applicable regardless of who was guilty of the accident, the employer or the worker.
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Workers’ compensation coverage also covers employers against lawsuits from workers who were injured while working for the said employer. If an employee dies while performing on the work, the coverage also will provide death benefits for any dependents.
It must be noted that workers’ compensation laws vary by state. Most states require all employers of a particular size to hold coverage. A few states don’t mandate coverage. For example, Texas doesn't require workers’ compensation coverage but requires employers to hide all medical expenses and costs associated with an injury on the work.
Employers and employees alike should confirm the laws and legalities of workers’ compensation insurance in their state.
Breaking Down Workers’ Compensation Insurance
To further understand workers’ compensation and how the coverage works, it should also be noted that while these policies can become complex and detailed, the gist of the coverage is simple.
An employer is usually required by state law to carry some sort of workers’ compensation insurance once they employ over a particular number of employees. The coverage applies to any injury incurred during the scope of employment.
For example, if an employee driving a car for work purposes gets into an accident that causes an injury, the workers’ compensation coverage would kick in. While it doesn’t matter if the car is personally owned or a corporation automobile, the coverage doesn't apply to and from work.
Generally, all injuries incurred while working are covered, even in rare instances such as natural disasters, terrorist attacks, and workplace violence.
Workers’ compensation also covers death and disability. If an employee dies from injuries on the job or is permanently disabled, the coverage provides benefits to the disabled individual or his grieving dependents.
Finally, an employee can waive his or her coverage and sue the employer if he or she believes this or her injuries stemmed from neglect. In such instances, the policies offer protection against lawsuits, legal costs, and more. This is an important factor for many businesses, as legal costs can add up to many lawsuits.
What is Not Covered?
Overall, there's no one-size-fits-all workers’ compensation policy once you begin looking across state lines. However, there are a few situations in which most workers’ comp policies will never cover:
- Workplace safety costs: If employees keep getting hurt on the job, an employer will need to make changes to the workplace and take safety measures into account. If not, said an employer could be fined by OSHA. These safety improvements and measures won't be covered by any workers’ comp coverage.
- Replacement employees: When an employee is injured and not working, an employer may need to fill the position to ensure work gets completed on time. While workers’ comp insurance pays an injured employee’s wage during this time, a company will be responsible for the replacement employee costs.
- Third-party problems: If a third party sustains an injury while at a place of business or job site, workers’ compensation will not cover the costs for the third party, like a customer. Workers’ comp is only for employees. A business is required to hold general liability insurance for injuries potentially sustained by third parties.
- OSHA penalties: An employer is responsible for maintaining a standard level of workplace safety and OSHA makes sure the company follows through on that standard. If not, an employer might be fined by the organization. Workers’ compensation insurance does not cover OSHA fines for a company.
Cheapest Rates
With regard to the cheapest workers’ comp rates, North Dakota has the cheapest. When rates were measured employing a comparable basis, North Dakota had rock bottom workers’ comp rates within the U.S. Where the average workers’ comp cost index cost was $1.85 in other U.S. states, North Dakota employers only paid $0.88 per $100 of payroll.
Most Expensive Rates
On the opposite side of the coin, California is that the U.S. state with the highest workers’ comp rates. Employers pay $3.48 per $100 of payroll in workers’ compensation. This is significantly quite North Dakota at $0.88 and well above the national average of $1.85.
The 6 Best Workers Compensation Insurance Companies
For employers looking for coverage, Benzinga recommends a list of the top three workers’ comp insurance providers.
1. J&L Risk Management
J&L Risk Management is the best insurance carrier within the U.S. to offer small business insurance. With its small business-only focus, it’s a top choice as a workers’ comp insurance provider. It assists small companies across the state to start with workers’ comp policies by assessing the requirements as businesses begin hiring employees. It offers a monthly payment option with no added fees and provides a 5% discount rate for bundling business policies like a business owner’s policy, cybersecurity policies, and general liability insurance.
2. Best Programs: Progressive
Progressive offers one-stop buying workers’ compensation insurance through their Progressive Advantage Business Program. This program offers small businesses an array of insurance solutions underwritten by specially chosen carriers.
Getting a quote is straightforward online through our partner or survive the phone with a trained expert. The specially trained experts help ensure tailored coverage to match your needs.
3. Best for Savings: biBEK
Berkshire Hathaway’s biBERK provides small business owners a straight-forward, cost-effective workers’ compensation insurance. biBERK takes the middleman out of the fray so you get insurance straight from the source. According to its website, you’ll likely save to twenty on costs. Plus, you’ll save time from the get-go with its easy online quote tool and claims process.
Finally, because the inimitable Warren Buffett leads Berkshire Hathaway, you'll rest easy knowing that biBERK inherits the experience, stability, and dependability from its parent.
4. Best for Experience: Travelers
Travelers is the largest provider of workers’ comp coverage in the U.S. with 7.81% of the market share. They have solid reviews and have written billions in direct premiums. No matter what industry you're in you'll customize your coverage and wishes to your specific business.
Their claims service is very rated and their competitive prices make them a top contender within the workers’ compensation insurance space.
5. Best Medical Provider Network: The Hartford
With 5.81% of the market, Hartford Group is that the second biggest provider within the U.S. When you get coverage with The Hartford you get a preferred medical provider network, prescription drug features, nurse case managers and pay-as-you-go billing solutions. With The Hartford, employers can select to pay their premiums annually or as they go, which many employers find beneficial and like to have the option.
The Hartford goes above and beyond by offering benefits that can't be found with every insurer. Get a custom quote today for the simplest premium on the market.
6. Best for Multinational Businesses: Zurich
Zurich Insurance holds over 5% of the workers’ comp market and writes billions in premiums each year. Zurich is praised for its fast, responsive claims service and its ability to service all employees, no matter their location. Employers will find working with Zurich makes this cumbersome insurance process smooth and stress-free.
Click the custom quote option to get instant rates and start insuring your employees with the best and most knowledgable carriers.
Final Thoughts
The best policy for an employer will depend on the state, rates, and other factors. There is not a one-size-fits-all policy when looking at workers’ comp coverage. A company would be best off looking through a plethora of coverage providers in their state to find the ideal option for its needs.
