Employers work hard to not only protect their business, but also those who work within it. As a business owner it is your job to make sure you and your employees are safe at work. This is where workers’ compensation (WC) insurance safeguards employers from those unexpected accidents on the job. Below are 5 aspects to keep in mind when looking for a WC insurance plan.
1) The Purpose of WC Insurance
Without workers’ compensation, you, the employer can be sued by your employees and held liable for the entire amount of healthcare costs in the event of a work related injury. WC insurance is provided to protect your employees, but it also protects the employer. Investing in WC insurance benefits both the employer and employee.
2) WC is Mandated
Workers’ compensation coverage requirements vary from state to state. Knowing what insurance regulations your state requires is crucial to protecting your business. Requirements can depend on the number of employees you have. In turn, this can determine whether your state requires the employer to provide the insurance or not. If an employer does not follow the state requirements they may be liable to large fines and penalties.
3) Red Flags
Malingering, also known as WC fraud is not common, but it is important for an employer to look for “red flags”. Factors contributing to fraud or malingering include motivation and circumstances of the claim that suggest exaggerated symptoms, inconsistencies, and behavior that does not match with the original claim. It is important to make sure your claims adjuster is conducting interviews with claimants, receiving clinical records and work reports to prevent any issues. If you are concerned fraud is taking place, contact your WC insurance provider immediately.
4) Pay-As-You-Go vs Traditional WC Insurance
Pay-As-You-Go is a service that allows an employer to pay their WC policy directly off payroll data. The Pay-As-You-Go program is designed to work off exact wages, leaving no need for estimations, giving employers an opportunity to improve cash flow and minimize end of year audits.
The Traditional method estimates your annual premium off of previous years recorded payroll. With this method, a down payment is required, monthly, quarterly, or yearly installments are paid and audits are done at the end of the year. Research both methods of workers’ compensation to see which fits your company best.
5) Find an Agent
Insurance is an important safety net for your business. Finding an agent is an important factor when choosing a WC policy. You want to look for an agent who works in the commercial insurance area, who has experience dealing in handling WC, and has access to multiple insurance carriers. The best way to find a reputable agent is through a business referral.
Employers working with the MPAY Network have lowered their chance of audits, improved cash flow, and automated the process to calculate directly off of their payrolls.
Photo Credit: John