Understanding Workers’ Compensation Insurance

​If you are a small business owner, there is a high probability that you have an employee working for you. In that case, by the U.S. law, you are required to apply for workers’ compensation insurance. This will protect both you and your employees in case of work accidents.

Requirements and Things to Consider
While it is implemented nationwide, the way it is regulated varies depending on the state. One of the best ways to find the appropriate workers’ compensation policy for you is to familiarize yourself with the state rules.

Depending on your state, you may be asked to purchase the policy from a private insurer or the state fund. You should also know how many employees you can have before you have to buy insurance. However, you should be aware that you will still be held liable if anything happens to them while working for you. The classification of these employees is also essential, whether they are working for you full time or part-time.

Workers’ Compensation Insurance Providers
The first thing to check is whether your state implements a public or private market for work comp. If you are in a public one, your only choice is to get the policy through the state fund. If you are in a state where the private market is implemented, then you have a few more options. You can choose from either an insurance agency, the state fund or an assigned risk pool.

If you have an agent, they can help you find the best prices in the market. However, you must be aware that this is a tedious task, as most independent agencies do not like writing work comp because it is less profitable than other policies.

If you are having a hard time finding coverage, you might want to consider getting one from an insurance carrier managed by the state. If you are handling business with higher risks, getting into assigned risk pools might give you better coverage.

Costs and Where They Are Spent
Since it is already a needed cost as you start your business, it is good to include it on your yearly budget already. Knowing how much you need to set aside depends on four factors.

Your class code must be determined. This refers to all the data on workplace injuries to assess the relative risks your employees may face. Others also include the location of your headquarters, the amount of your payroll for employees, and your experience as an employer.

As a business owner, you will have little control over the premiums you are going to pay for the policy. However, you can still control the costs by encouraging your employees to practice safer habits at work. Protect yourself and your employees from liabilities and accidents by finding the right workers’ compensation insurance today.

At American Eagle Insurance, we put our clients first by offering them policies that they can afford. Having insurance is a necessity nowadays and we're here to help you out. Learn more about our products and services by calling our agency at (225) 667-7377. You can also request a free quote by CLICKING HERE.