General Liability And Workers Comp Insurance In USA 2023

General Liability And Workers Comp Insurance In USA 2023

If you run a business with employees, then workers’ compensation insurance is something you may want to consider. It provides benefits to employees injured on the job, while also offering some protection against lawsuits from injured workers. Below is our list of general liability and workers comp insurance, as well as information to help explain workers’ compensation insurance.

Our Best Workers’ Compensation Insurance Companies Rating

  • 1 Hiscox
  • 2 Travelers
  • 3 Chubb
  • 4 State Farm
  • 4 Nationwide
  • 6 Progressive
  • 6 The Hartford
  • 6 Liberty Mutual

What Is Workers’ Compensation Insurance?

A workers’ compensation insurance policy provides coverage for your employees if they’re injured on the job. It also can provide compensation benefits such as coverage for medical expenses and lost pay for injured employees while they’re not working. If a worker is killed in a workplace accident, their family may be eligible for funeral or death benefits. Exactly which benefits are required and at what coverage minimums are regulated by the states?

While there are exceptions, in most states it doesn’t matter who is at fault for the injury. Some of these exceptions include if the employee:

  • Was intoxicated (whether drugs or alcohol)
  • Started a fight
  • Intentionally caused the injury
  • Was commuting to or from work

In most states, businesses buy workers’ compensation from insurance companies. However, there are a few instances where workers’ compensation is offered by a state or territorial agency.

How Much Does A Workers’ Compensation Policy Cost?

The premiums for a workers’ compensation policy are determined by several different factors, including:

Industry. Industries with higher risks for workplace injuries will have higher workers’ compensation premiums.
Annual payroll. Insurers will look at your annual payroll to help determine your rates. The larger the payroll, the higher your rates.
Location. This will factor into your premiums in a couple of different ways. The first is that different states will have different employers’ comp requirements, and this will affect premiums. Also, insurers will look to see what associated risks your business’s location may have, such as the local crime rate or vulnerability to weather-related risks like flooding.
Claims history. An insurance company may look into your claims history when calculating your premiums. The more claims your business has filed in the past, the higher your premiums will usually be.

Is Workers’ Compensation Insurance Required?

According to the Small Business Administration, all businesses with employees must have workers’ compensation insurance. However, many states may grant employers an exemption to that requirement. State regulations also govern which workers are considered employees. Some states won’t count immediate family members, such as children or spouses, as employees for the purposes of determining workers’ comp requirements. Independent contractors also may also not count as employees in some circumstances.

Companies that are required to have workers’ compensation insurance but fail to purchase coverage may be penalized. For example, in Virginia, a business in violation of the Virginia Workers’ Compensation Act can be subject to fines of $250 for each day it is uninsured, as well as a maximum civil penalty of $50,000 plus associated costs.

You should check with your state’s Department of Insurance or Workers’ Compensation Commission for information on any requirements that may pertain to your business. Your insurance company, agent, or broker may also be able to provide you with information on local requirements.

How Much Workers’ Compensation Insurance Coverage Do I Need?

How much workers’ compensation coverage you need will likely depend on where your company is located. Your state or territory will likely determine which of your workers counts as an employee. It will also determine whether or not you’re required to have workers’ compensation, and who should be covered by the policy.

States may also regulate the benefits included in a workers’ comp policy. For example, one state may require a workers’ compensation policy to provide benefits for the duration of an injury or disability, while another state may cap the benefits to a specific period of time.

It is important to check with either your insurance agent, broker, or company to be sure. In addition, check with your state’s workers’ compensation commission or Department of Insurance to research what requirements your policy needs to meet.

How To Choose the Right Workers’ Compensation Insurance Company for You

When choosing an insurance company for any type of policy, you will want to make sure that you choose the one that offers the coverage and features you need for a price you can afford. Here are some steps that you can take to choose the best workers’ compensation insurance company for you:

  1. Research which companies offer workers’ compensation policies in your state. Just because an insurer operates in all 50 states and Washington, D.C. doesn’t necessarily mean that it offers a workers’ compensation policy for businesses in your area.
  2. Research which companies offer other types of business insurance that you may need. Having all your business insurance policies with one insurer can make things easier for your company. Instead of working with several different agents or companies, everything is in one place.
  3. Get multiple quotes. Once you know which companies offer the policies you need, you can go about getting quotes from those companies. Many companies have the option of getting online quotes if you’re not quite ready to talk to an agent.
  4. Talk to a trusted agent or broker. An insurance agent or broker with experience in your industry and area will be able to help you narrow things down and identify potential coverage gaps. 

You may also want to look at a company’s financial strength. A credit rating agency like AM Best provides financial strength ratings for insurance companies. These ratings can be a helpful way to gauge a company’s ability to make good on its financial obligations, like your workers’ compensation policy.

During your initial research or when talking to your broker or agent, you may also want to ask about an insurer’s customer service and availability.

Workers’ Compensation Insurance FAQ

Who is covered by a workers’ compensation insurance policy?

Who is covered by a workers’ compensation insurance policy is regulated at the state level. In some states, an independent contractor or part-time employee may not be covered by a workers’ compensation policy. However, that doesn’t mean you can’t add an endorsement to a workers’ comp policy to cover people like volunteers who are not typically covered. Also, employees who are injured while working out of state may not be covered by some policies.

What is a workers’ compensation insurance audit?

A workers’ compensation audit is when an insurance company reviews your company’s payroll. The insurer will do this because the premiums for a workers’ comp policy are in part based on the size of your payroll, and it will want to ensure that you are paying the appropriate amount for your coverage.

What is a workers’ compensation state insurance fund?

A workers’ compensation state insurance fund is a state-run fund that provides workers’ compensation coverage for businesses. This can either be in lieu of private insurers or in addition to them.

What are the types of workers’ compensation state insurance funds?

There are a couple of different types of state workers’ compensation funds.

  1. Monopolistic: This type of workers’ compensation fund is the only source of workers’ compensation coverage in the state. States that have a monopolistic fund include North Dakota, Ohio, Washington, and Wyoming.
  2. Competitive: States with a competitive workers’ compensation fund allow companies to choose workers’ comp policies from either private insurance carriers or from the state-run fund. A few examples of states with competitive funds include Arizona, California, Maryland, Pennsylvania, and Texas.

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