Workers’ compensation insurance is required in almost every state for businesses that have employees. It can cover medical costs and lost wages for work-related injuries.
Workers’ compensation protects employees at your insurance agency
From claims adjusters to property and casualty agents, no insurance worker is resistant to injury. If an employee is injured at your office, your business might be expected to hide medical bills and wages while the worker recovers.
Workers’ compensation can help buy an injured employee’s:
Immediate medical costs, such as an ambulance ride
Ongoing medical costs, such as physical therapy
Partial lost wages thanks to time faraway from work
Workers’ comp protects insurance business owners
Usually included during a workers’ comp policy, employer’s insurance offers protection when an employee decides to sue a business owner to recoup hospital bills and other damages.
Employer’s liability insurance can help cover:
- Attorney’s fees
- Court costs
- Settlements and judgments
Even if a lawsuit is frivolous, without insurance, you could find yourself paying for a costly legal defense.
How much does workers' comp cost for insurance businesses?
The amount you buy workers’ compensation may be a specific rate supported every $100 of your business’s payroll. Your premium is decided by the sort of labor done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).
The formula is:
Classification rate x Experience modification rate x (Payroll / 100) = Premium
State laws set workers’ comp requirements
Every state has a unique set of laws for workers’ compensation. Insurance businesses in Illinois, for instance , are required to hold workers’ compensation insurance for his or her employees. This includes part-time workers. On the opposite hand, agencies in Texas are never required to hold workers’ compensation.
While self-employed or independent contractors, sole proprietors, and partners don’t need to carry workers’ compensation insurance, you'll purchase it to shield your adjuster company or other insurance business.
Monopolistic state funds
In certain states, insurance businesses must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:
- North Dakota
- Ohio
- Washington
- Wyoming
If you buy workers’ comp through a monopolistic state fund, it's going to not include employer’s insurance . However, you'll purchase it from a personal insurer to fill this gap in coverage.
Lower workers’ comp costs with risk management
Even office workers are at risk for an injury. They could slip on a wet floor, trip over equipment, or get carpal tunnel syndrome from too much typing. If an insurance broker or broker is injured on the work , it could lead on to an claim – and an increase in your premium.
You can manage your risks by providing safety training and reducing hazards within the workplace, like uneven flooring. Through something as simple as teaching proper lifting techniques, it's possible to scale back workplace injuries, along side insurance rates.
Other important insurance policies to consider
Workers’ compensation protects your employees and to some extent your business, but it doesn't provide complete protection. Owners of insurance agencies should also consider:
General liability insurance: This policy can cover expenses associated with customer injuries and property damage, along side lawsuits over slander and other advertising injuries.
Business owner's policy: This policy combines general insurance with commercial property insurance, typically at a lower rate than if the policies were purchased separately.
Errors and omissions insurance: This policy, sometimes called professional insurance , can cover legal fees if a client sues over an insurance agent's work performance.
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