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Complete Guide to Workers' Compensation Insurance

Updated: Jun 1, 2023

Disclaimer: Informational statements regarding insurance coverage are for general description purposes only. These statements do not amend, modify or supplement any insurance policy. This website does not make any representations that coverage does or does not exist for any particular claim or loss, or type of claim or loss, under any policy. Whether coverage exists or does not exist for any particular claim or loss under any policy depends on the facts and circumstances involved in the claim or loss and all applicable policy wording.


Vehicle driving on snow covered roads in winter

As you gear up for another day at work, maybe you're dreaming about a promotion or a nice raise. Or perhaps you're a business owner, putting on your tie and smiling as you think of everything you're going to get done today.


But let's face it - no matter how good you are at your job, nobody thinks about what might happen if they get injured. Or worse, what will happen if one of your employees gets hurt at work?


Yet this happens to thousands of people across the country every year. So what happens next? Who's responsible for footing that hefty hospital bill? That's where worker's compensation comes in.


Let us answer some questions about workers' compensation to help guide you, for those unfortunate - and sometimes unavoidable - situations.


What is Workers' Compensation Insurance?


At its most basic level, workers' compensation insurance is a type of insurance that provides injured workers with financial and medical assistance in case they get hurt on the job.


Every state has its own laws and regulations about how worker's compensation works, but essentially, this insurance is designed to make sure employees don't face undue hardships if they get hurt while doing their job.


If you're injured at work, worker's compensation can cover medical bills, disability benefits, and lost wages. But what types of injuries can be covered?


Anything from carpal tunnel syndrome caused by typing at a computer all day, to a construction worker falling from scaffolding, to managers developing stress illnesses from their job, and beyond!


Essentially, any work-related injury serious enough to result in disability or time lost from work may be covered by workers' compensation.


Who - and What - Is Covered By Workers' Compensation?


Any employee who works for an employer that carries workers' compensation insurance is eligible for compensation in case of work-related injuries or illnesses.


This includes full-time and part-time employees, seasonal workers, and temporary workers.


However, there are some exceptions, such as clergy and members of supervised amateur athletic activities.


The best way to know for sure is to check with your state's workers' compensation board or a qualified insurance agent.


Workers' compensation typically covers any injury or illness that arises out of or in the course of employment. This can include physical injuries, such as falls, burns, cuts, strains, and fractures, as well as occupational illnesses that arise as a secondary effect of the work, such as cancer due to chemical exposure, hearing loss from a loud working environment, and repetitive stress injuries.


Workers' compensation can provide payment for all of the following types of expenses:

  • Healthcare related to your injury

  • Cash benefits that consist of up to two thirds of your average weekly wages, up to a maximum

  • Travel expenses to and from healthcare appointments

What Isn't Covered by Workers Comp?


Not all work-related injuries or illnesses are covered by workers' compensation. In fact, it's important to be mindful of the rules surrounding workplace compensation and fraud.


Workers compensation fraud is, unfortunately, common. It can be committed by employees, employers, and even health care providers. This kind of fraud can lead to higher premiums and legal penalties, so it's important to be mindful of what incidents might be covered, regardless of whether you're the employer or the employee.


The exact circumstances of your claim matter, so it's always important to talk to a qualified insurance or legal professional if you're unsure of what might be covered (or not covered) by workers' compensation.


Do Business Owners Need Workers' Compensation Insurance?


For the most part, all businesses with employees in New York State need workers' compensation insurance.


There are only a few situations where for-profit businesses can be exempt.


One situation is if your business is a "true sole proprietorship." This means the business must be owned by one individual who has no employees, part-time employees, leased employees, borrowed employees, unpaid volunteers, subcontractors, or family members providing work without pay.


To qualify as a true sole proprietorship, the business cannot be a corporation.


Another situation where you can be exempt from providing workers' compensation coverage is if your business is a partnership - again, with no employees.


A one or two-owner corporation with no employees can also be exempt from providing workers' compensation coverage in New York. In this case, the corporation must be owned by one or two individuals who do not have any employees, part-time employees, leased employees, borrowed employees, unpaid volunteers, subcontractors, or family members providing work without pay.


How Much is Workers' Compensation Insurance?


Payroll is the most significant factor. The nature of your business can also affect the cost of workers’ compensation insurance. Certain industries, such as construction or manufacturing, have a higher risk of accidents, leading to more claims. Therefore, the rates, and thus the premiums, for a construction or manufacturing business will be higher than for other industries.


Insurance providers also analyze your business's risks to determine your coverage's cost. Your company may be deemed "high risk" if the number of claims is higher than the industry average or if you have a more dangerous workplace.


As a result, your workers' compensation insurance premiums will be higher than if you were viewed as "low-risk."


The Bottom Line


It's also important to know employers who don’t have insurance are subject to hefty state fines and court penalties.


Most importantly, workers' compensation insurance ensures employees are well taken care of in the event of an injury or illness while also providing peace of mind for business owners.


When selecting a workers' compensation insurance policy, it's important to work with a licensed insurance agent and consider factors such as legal requirements, overall cost, coverage, financial stability, and reputation.


Do your research and understand what's required for your unique situation - after all, not knowing what you're getting into could be more painful and costly than any accident.


Talk to an insurance professional to learn more. Here at Northern Insuring Agency, our professionals can help you learn more bout the options and coverage choices for your business. It doesn't have to be a pain!


Get in touch today for a quote! Northern Insuring will simplify the complicated...for insurance.


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