Worker’s compensation insurance is insurance carried by businesses to protect employees who are injured on the job. It can be expensive, but it is mandatory by law that businesses carry it.
Workers comp claims must have 3 critical components in order to be paid.
- There has to be an employee-employer relationship. Independent contractors those in a partnership are not protected by the law.
- The injury must be an accident.
- The accident must take place "out of employment" and "in the course of employment."
The cost of your Workers' Compensation insurance policy is determined by a company's Experience Modification or Ex Mod. This considers your previous loss history. The more money you have paid out to losses the more expensive your policy.
You pay the lowest premiums when you have no losses or claims. However, if a loss does occur there are ways to keep your costs down. One way is by implementing a Return To Work program.
A Return to Work program, or RTW, is when you create a job for your injured employee in order to bring them back to work more quickly and earning at least some money, even if the position is not full-time.
If the employee is earning money, the insurance company pays less to that employees for lost time. If the insurance company pays less, then the Ex Mod is not as high, keeping your worker's compensation insurance costs down in the future.
Your insurance company or agent can help you establish a RTW program. For more information on worker’s compensation insurance and keeping costs down, contact TriState Business Insurance.