Regulated by the states, workers compensation insurance is quite unlike any other kind of small business insurance. There are in fact, 49 states which require that all businesses with employees, have this insurance, and this has led to coverage prices varying wildly from one state to another. Rules also vary wildly from state to state, making this kind of insurance, a tricky one to get to grips with. Read on to find out more about the intricacies of workers compensation insurance:
What effect does workers compensation class codes have on insurance costs?
Much of the U.S. is governed by The National Council on Compensation Insurance (NCCI), an independent body responsible for regulating and overseeing Workers Compensation. The NCCI have a unique set of classification codes that put peoples’ jobs into categories, and there are currently more than 700 codes. Each of these codes refers to a specific type of work, and is the result of much research into the types of injuries that employees may be at risk from, when exposed to it. Naturally, the riskier a type of job may be, the more Workers Compensation insurance is likely to cost.
It therefore stands to reason that someone who is employed as an accountant, will cost you less in insurance than someone who is employed as a lumberjack.
Changes to workers compensation insurance:
As individual states pass new insurance laws or put new policies into place, the changes will happen gradually and in a piecemeal fashion. Recent years have seen the cost of Workers Compensation Insurance go consistently down, raising concerns that employers are no longer able to offer adequate coverage for their employees. In Florida, for example, it was recently ruled in court that there is no longer a fair exchange for workers waiving their rights to sue if they are injured while at work, leaving employers open to potential lawsuits over injury claims.
While low cost insurance coverage may sound appealing to small business owners, it’s important that you don’t rush into things, and thoroughly research what options are available to you. One way of ensuring that you get the correct type of workers compensation insurance for your employees, without having to break the bank, is to use the services of a professional company who specialize in this type of coverage. Engaging with them will see that you give your staff the best insurance that you can afford, while keeping in line with current state and federal laws.