Duncan & Stoker
Commercial Insurance Solutions Inc.

What is workers’ compensation insurance, and what does it cover?

 

Workers’ compensation insurance covers medical expenses, lost wages, and rehabilitation costs for employees injured or sickened due to work-related activities. It also provides death benefits to dependents and protects employers from lawsuits related to workplace injuries.

How much does workers’ compensation

insurance cost?

 

Costs depend on payroll, industry, location, and claims history, typically ranging from $0.75 to $2.75 per $100 of payroll. High-risk industries (e.g., construction) may pay $5–$15 per $100. A small business with $100,000 payroll might pay $750–$2,750 annually.

What happens if I don’t have workers’

compensation insurance?

 

Operating without required workers’ comp can lead to fines, legal penalties, or business closure. You may also face lawsuits from injured employees and be personally liable for medical costs and lost wages, which can be financially devastating.

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How do I file a

workers’ compensation claim?​

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Report the injury to your insurer immediately, provide details (e.g., date, cause), and ensure the injured employee completes necessary forms. Follow state-specific procedures, as delays or incomplete documentation can lead to claim denials or penalties

What is a certificate of insurance for workers’ compensation, and why is it needed?

 

A certificate of insurance proves your business has active workers’ comp coverage, detailing policy limits and dates. Clients, contractors, or regulators may require it to verify compliance with contracts or state laws. Your insurer can provide this document.

Is workers’ compensation insurance required

for my business?

 

Most states require workers’ compensation insurance for businesses with employees, even part-time. Requirements vary by state, with some mandating coverage for sole proprietors in high-risk industries like construction. Check state laws to avoid fines or legal issues.​​​​​

Do I need workers’ compensation for independent contractors or freelancers?

 

Generally, no, as independent contractors are not considered employees. However, some states require coverage if contractors are misclassified or perform high-risk work. Verify contractor status and state laws to avoid penalties.

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Does workers’ compensation cover all types of workplace injuries?

 

It covers most work-related injuries and illnesses, such as slips, falls, equipment accidents, or occupational diseases. Exclusions include injuries from intoxication, self-inflicted harm, or non-work activities. Coverage details depend on state laws and policy terms.

Can an employee sue me if I have workers’ compensation insurance?

 

Workers' comp generally prevents employees from suing for workplace injuries, as it's a no-fault system providing benefits in exchange for limiting lawsuits.  Exceptions may occur for gross negligence or intentional harm, depending on state laws.​​

How can I reduce my workers’ compensation insurance costs?

 

Implement workplace safety programs, train employees, and maintain a claims-free history to lower premiums. Work with your insurer to classify employees correctly, as high-risk job codes increase costs. Some states offer discounts for safety certifications.

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