Workers' Compensation Protects Your Employees
Workers' compensation protects your employees should an injury occur during the course of employment. Payments are made to the injured party and can consist of medical payments, loss of wages or therapy.
All states require that all employers carry workers' compensation insurance and each state has individual laws that must be met.
At the very minimum, workers' compensation insurance policies will cover an employee's medical expenses and reimburse him or her for some percentage of lost wages.
Almost all states are "open market," which means the coverage is underwritten by private insurers; and some states are "closed" or "monopolistic" where the coverage is underwritten by a state-sponsored fund (North Dakota, Ohio, Washington, West Virginia, Wyoming). In states that are open, rates can vary between insurance carriers depending on the type of business the carrier is attempting to attract. In an open market, the rates are competitive.
Employers with one or more employees are subject to the provisions of their state's Disability Benefits Law. This law provides benefits to employees who may be become disabled because of injuries or sicknesses off the job or that may arise from other conditions such as pregnancy. Payments for these types of benefits are only allocated for the payment of wages, unlike that of workers' compensation which provides payment for medical costs.
Rates for these policies are dependent on the degree of hazard that each occupation carries. Each occupation is coded and defined by state laws. Premiums are determined by the amount of payroll in each occupation code and is subject to annual audit for verification.