Don’t forget Workers Compensation Insurance
Workers Compensation Insurance (work comp) each state requires businesses with employees (except Texas) to carry work comp. Specific rules and requirements are state specific. With the exceptions of Ohio and Washington employers can purchase work comp through private insurers. Ohio and Washington require employers to buy work comp through state run (monopolistic) funds. The state work comp bureaus fine businesses that do not follow the state requirements for work comp.
Premiums are determined by the classes of employees, wages, and loss history (employer mod).
Conceptually employees injured on the job have insurance coverage for the injury. Employees normally do not have to prove negligence for coverage. In return, with few exceptions, work comp prohibits employees from suing employers.
There are 2 main parts to work comp coverage:
Part One – Workers Compensation Insurance
This is the core coverage and satisfies the state-mandated benefits for employees injured on the job.
Pays for:
- Medical expenses
- Hospitalization
- Tests & X-Rays
- Prescription Drugs
- Long-Term Treatment for Chronic Care
- Lost wages/Disability Coverage
- Replacement Income
- Typically 2/3 of Wages
- Partial to Total Disability
- Rehabilitation costs
- Physical Therapy
- On-the-Job Training
- Retraining
- Job Placement
- Psychological or Psychiatric Care
- Death benefits
- Compensation to Financially Dependent Relatives
- Recoup Loss of Financial Support
No limit on coverage (as long as it’s within the state’s benefit schedule)
Employers don’t choose the limits; they’re set by state law
Part Two – Employers Liability Insurance
This covers the employer’s legal liability for employee injuries or illnesses not covered under Part One.
Pays for:
- Legal defense costs
- Settlements or judgments
Covers scenarios like:
- Third-party over actions
- Loss of consortium claims
- Dual capacity suits
The policyholder choses Part Two limits. Common limits are:
- $100,000 per accident
- $500,000 policy limit for all bodily injury by disease
- $100,000 per employee for bodily injury by disease
Other Sections such as Other State Insurance, when properly reported automatically provide coverage for states not listed in part one.
Contact Me Today
Lee Norcross, MBA, CPCU
California License # 0D87292
L Squared Insurance Agency, LLC ® DBA in California as L2 L Squared Insurance Agency, License # 0L93416
Managing Director, CEO
Lee@L2Ins.com
616-726-7080
