Required Coverage for Your Employees
Introduction:
Welcome to Cusick Insurance Brokers, Ltd., your trusted partner in understanding and securing workers’ compensation insurance. We understand the unique needs of businesses and organizations across various industries in the western United States. In this guide, we’ll break down what workers’ compensation insurance is, what it covers, what it doesn’t cover, and how pricing is determined.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance is a vital protection for both employers and employees. It provides financial support to employees who suffer work-related injuries or illnesses, covering medical expenses, lost wages, and rehabilitation costs. Additionally, it safeguards employers from potential lawsuits related to workplace injuries.
What Workers’ Compensation Covers:
- Medical Expenses: Covers the cost of medical treatment for injured employees.
- Lost Wages: Provides compensation for the wages lost due to the injury or illness.
- Rehabilitation: Supports the injured worker’s rehabilitation and return to work.
What Workers’ Compensation Doesn’t Cover:
While workers’ compensation is comprehensive, it typically doesn’t cover:
- Injuries sustained while under the influence of drugs or alcohol.
- Self-inflicted injuries.
- Injuries occurring during off-duty activities.
- Injuries caused by violating company policies.
Determining Pricing:
The cost of workers’ compensation insurance is determined by several factors, including:
- Loss History: A strong safety record can lead to lower premiums.
- Industry/Classification of Employees: Different industries have varying levels of risk.
- Estimated Remuneration: Workers’ compensation premiums are often based on estimated remuneration, which includes employee salaries and benefits.
Estimated Remuneration vs. Payroll:
Estimated remuneration is a broader figure that includes not only salaries but also benefits like health insurance and retirement contributions. It’s a more accurate reflection of labor costs than just payroll.
Policy Year Audit:
At the end of the policy year, your estimated remuneration will be audited. If the actual remuneration is higher, you may owe additional premiums. If it’s lower, you might receive a refund.
Experience Modification Factor:
The experience modification factor, often called the “mod,” is a crucial factor in workers’ compensation pricing. It’s a numerical representation of your company’s safety history. A mod below 1.0 typically results in lower premiums, while a mod above 1.0 can lead to higher costs.
Conclusion:
Workers’ compensation insurance is a critical part of protecting your employees and your business. At Cusick Insurance Brokers, Ltd., we specialize in understanding the unique risks faced by businesses in various industries in the western United States. Our expert advisors can help you navigate the complexities of workers’ compensation insurance and find the coverage that suits your needs.
Contact us today to discuss your workers’ compensation insurance needs and take a step towards a safer and more secure workplace.
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