Are you a contracting business that retains employees in the United States looking for liability insurance? If so, our insurance team at Contractors Liability® is ready to answer some common questions for you and provide you with a free quote as well.
So you have grown your business and you have several employees to manage. This is fantastic news, however, with a team of employees brings greater responsibility. As an employer you are required to protect your employees with Workers Compensation Insurance. Workers compensation, also referred to as Employers Liability Insurance, is required in all 50 states with one exception Texas, so if you have employees, you need to have this insurance.
What is Workers Compensation
In the case where an employee is injured or becomes sick as a result of employment, worker’s compensation is an insurance that provides your employees with income replacement and benefits. Depending on each case, worker’s compensation will cover you and your employees for:
- Compensation for Lost Wages
- Medical Benefits
- Disability Benefits
- Rehabilitation Benefits
- Death Benefits
- Liability Insurance for Legal Defense
Do I Need Worker’s Compensation Insurance?
The first thing you need to know before getting a worker’s compensation quote is whether you need the insurance or not. Every state has its own laws on who needs it and if you have less than 3-5 employees you usually do not need the insurance. However if you have had growth and have more than 5 employees you will usually be required by law to carry workers compensation. Some states will also offer an employer the chance to self-insure instead of use a company for this. When you self insure, this means that the company will cover the costs that come in from on the job injuries from their own pockets. This may be a choice that works for you, but it really is not for everyone.
How Much Will Workers Compensation Cost?
So if you are among those (and most are) who need to go through an agent, you probably have questions like how much coverage do you need per employee that you have and how much will it cost you? There is no fast answer for how much you are going to pay for your insurance because it will vary depending on the type of contract work that you do and approximately 700 other occupational codes that are used by companies to decide on the premium. The codes are not just thrown in there by each company they have been developed by the National Council on Compensation Insurance Inc to be used across the board.
An example of how rates can look depending on the type of business that you run is as follows:
A low risk occupation like an office worker:
It could cost 30 cents per $100 of payroll for this employee.
Higher risk jobs like contractors:
We see the rates go up they could cost around $4 per $100 of payroll.
Then jobs that are considered an extreme risk for accident like truckers would be on the higher end yet with a possible cost of $10 per $100 of payroll.
Are Independent Contractors, Subcontractors or Sole Proprietors Covered?
The relationship between an employer and employee versus an independent contractor has various interpretations across different states. Some states do not apply workers compensation laws to independent contractors and specify that they are not employees. However some states will hold you responsible to the subcontractors employees, and in this case would require Worker’s Compensation Insurance.
Will My Rates Change?
When you get coverage for workers compensation it is most commonly set for a three year period of time. During this three years, the company that is insuring you will track the number of claims that you submit to them. After that first three years with the monitoring you will often see a “experience modification factor” will be applied. If you have less claims than a company in the same field with similar employee numbers, you will often earn a partial refund of premium. If you build safety practices around your company and business you can often times earn further discounts depending on your insurer.
What Happens If I Don’t Have Worker’s Compensation ?
Worker’s Compensation Insurance compensation is mandated in all 50 states and you will be fined larger penalties for failure to provide worker’s compensation. You will also be at risk for paying thousands of dollars for covering the cost of employee injuries. As the employer you are responsible for providing coverage to your workers in the case where one is injured and cannot return to work.
Where Can I Buy Worker’s Compensation?
When you are ready to start your workers compensation insurance, you will want to shop around and do your research. With ContractorsLiability.com we save you the time and trouble of shopping around for the right coverage. We deliver fast same day quotes that meet your needs. To get started today, request a liability quote and one of our representatives will contact you with the best rates.