What Is Workers’ Compensation Insurance How It Works, and Who Pays?
Workers’ compensation insurance, sometimes called workman’s compensation insurance, workers’ liability insurance, workers’ comp insurance, or employers liability insurance, covers your employees’ medical expenses and at least some portion of their lost wages if they are injured on the job.
Workers’ compensation insurance provides medical benefits and wage replacement to your employees if they are injured in the course of their employment in exchange for giving up their rights to sue you.
Did you know? The average cost of a workplace injury is $39,000.
What are the benefits of workers comp in NY?
Most states require companies to purchase workers’ compensation insurance for their employees. A few states have “pools” of insurance that is available for you to purchase, but in most states, companies must find private workers’ compensation policies.
Who is required to have workers compensation insurance in NY?
The short answer is that your state’s statutes likely require Worker’s Compensation Insurance. However, like any insurance product you buy, you need Workers’ Compensation coverage to protect you and your small business assets.
Workers’ compensation is crucial in these common scenarios:
- An employee develops carpal tunnel syndrome from repetitive typing. Did you know there are over 3 million cases of carpal tunnel syndrome each year? It is very common! Worker’s Compensation Insurance covers the necessary medical care for this employee since the injury is work-related.
- An employee is partially disabled following an on-the-job accident. Workers’ comp covers their disability benefits. In 2019 alone, there were over 4.6 million medically-consulted injuries on the job, according to the National Safety Council!
- A pile of heavy boxes falls over, and one lands on your employee’s foot. They are off the job for weeks! Workers’ comp covers their lost wages.
Because workers’ comp insurance is mandated by law, small-business owners often think that it is just one more overhead expense that provides little benefit. But good workers’ compensation insurance is actually an affordable benefit that protects both you and your employees.
Following are the optional parts of workers’ comp insurance policies that have an impact on the cost and value of the coverage for you and your employees:
- In the employers’ liability section, or “part two” coverage, your legal expenses would be covered if an employee makes an inappropriate claim of work-related illnesses or injuries. While this section is almost always included in workman’s compensation insurance, you can choose the amount of liability coverage in this section.
- Coverage for employees who are injured in states outside those where your business normally operates.
- Coverage for various types of injuries and illnesses. The mandated part of this section depends on the state where your business is located, but you should be aware of what is and is not covered.
- Coverage for funeral expenses and financial support to dependents.
- Reimbursement percentages for lost wages.
The cost of workers’ comp insurance can vary widely depending on these options, so if you are comparing premium costs, you need to be aware of these variables.
How do you apply for workers’ compensation?
The regulations regarding the application process for workers’ compensation differ from state to state. Typically, if a worker sustains an injury or falls ill due to their job, they should:
1. Document the specifics of the injury or illness meticulously, including photographs and the names of any witnesses, if available.
2. Inform their employer about the incident. The employer will then proceed to file a claim with the insurance provider.
3. It is advisable to follow up with the employer’s insurance company to ensure that the claim has been submitted.
If your claim is rejected, you have the option to challenge the decision by appealing to your state’s Workers’ Compensation Board.
What is the penalty for not having workers comp insurance in NY?
As per the regulations set by the Workers’ Compensation Board (WCB), businesses in New York may face fines of up to $2,000 for every 10-day duration in which they do not provide workers’ compensation coverage. This penalty can accumulate rapidly, and upon receiving their initial notification, employers may already owe more than $12,000 in fines. The New York state website provides important information regarding worker’s compensation insurance rules and requirements.
Do independent contractors need workers compensation insurance in NY?
The workers’ compensation system in New York does not extend its coverage to independent contractors. Instead, independent contractors have the option to file a personal injury lawsuit against the responsible party if they sustain injuries or fall ill while on the job. Employers are not obligated to provide workers’ insurance coverage for independent contractors. However, it is important to note that independent contractors may still be considered employees, even if they do not meet the criteria for an employer-contractor relationship. According to New York law, subcontractors, day laborers, part-time employees, leased or borrowed employees, and unpaid volunteers are generally classified as employees for workers’ compensation purposes. There are some exceptions to this classification. For instance, volunteers who offer their services to a government entity are eligible for workers’ compensation coverage. If a volunteer is deemed an employee, they are entitled to receive medical benefits. However, they are not eligible for wage loss benefits resulting from their volunteer work.
Who pays workers’ compensation insurance premiums?
The responsibility of paying workers’ compensation insurance premiums lies with the employer. Unlike Social Security benefits, there is no deduction from the employees’ payroll. It is mandated by law that the employer must cover the costs of workers’ compensation benefits, which are determined based on the specific regulations of each state.
Trusted Workers’ Compensation Insurance
For first-rate, small business Workers’ Compensation insurance look no further than WeInsureXYZ. We not only offer the coverage you need, but we also make purchasing and maintaining your policy so easy. If this is your first time considering worker’s comp insurance, then you probably have questions. As it happens, we have answers!
What is the price of workers’ compensation insurance?
The price of workers’ compensation insurance differs from state to state, and it also depends on the required benefits. Additionally, the rates vary based on whether the employees are engaged in low-risk or high-risk occupations. The insurance fees are determined by the company’s payroll figures. Here are a few examples: In New York, the average cost is 7 cents per $100 for low-risk jobs and $29.93 per $100 for high-risk jobs.
Compare New York Workers’ compensation Insurance Costs & Quotes
Seriously, understanding workers’ compensation is an essential part of being a small business owner. Put simply, if you have employees, you should have workers’ comp insurance. Even if you think you would never need to file a claim, not having it opens you up to state penalties, including fines. Having workers’ compensation insurance gives you and your employees peace of mind. You’ll know any on-the-job injury-related claims will be handled!
Ready to compare the cost of Workers’ Compensation Insurance policies for your business? Fill out our brief online application, and one of our agents will send Workers’ Compensation Insurance quotes to your email inbox. In most cases, you can expect to receive business insurance quotes within a matter of minutes.