Job-related injuries are a common risk across industries and businesses, and it’s one that employers might be held responsible for. Workers compensation insurance helps employers give employees who suffer on-the-job injuries compensation.
Workers compensation insurance is normally paid for by employers, but it’s an insurance that benefits both employers and employees. Employers receive coverage for potential costs that could arise from a workplace injury, and employees get reassurance that they’ll be financially cared for if something happens.
The vast majority of businesses are legally required to carry workers comp insurance, and probably should do so even if the legal obligation weren’t in place. Most states require businesses that have employees to maintain current workers comp. (There may be exceptions for a few states and/or select businesses within states.)
Businesses that aren’t sure whether they need workers comp can speak with an insurance broker who knows this coverage well. A knowledgeable broker will be able to review the legal requirements for the states where a business has operations, and then find the business any coverage that it might need.
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The National Council on Compensation Insurance (NNCI) maintains a system of codes that classify workers, and most insurance companies use these codes when underwriting and auditing workers comp insurance. The codes are all four digits.
A couple of codes that lenders might want to be aware of are 8810 and 8868:
There are still other codes that lenders’ employees might be classified under. An informed insurance broker will be able to explain why certain codes are used for a lenders’ employees.
Workers compensation audits are routine. Businesses shouldn’t be worries about them, but keeping accurate records is an essential part of preparing for them.
When insurance companies initially calculate workers compensation premiums, the insurer relies on employment data that the policy holding business provides. The business then pays a calculated premium based on the salary and other data provided.
The purpose of a workers compensation audit is to verify that the initially provided data was accurate. Insurance companies not only want to confirm accuracy at the time of underwriting, but they also want to check for any significant change in personnel. Businesses regularly undergo personnel changes that must be taken into account for an accurate premium calculation.
The audit is conducted after a workers compensation policy ends, and the insurer will ask for employment records so they can conduct the audit. This is why maintaining accurate records is so important.
Should an audit uncover a discrepancy between the premium paid and what should’ve been charged, the discrepancy will be reconciled. A business will have to pay the difference if premiums were underpaid initially, or a business will receive a refund if premiums were overpaid.
In most states, workers compensation doesn’t legally preclude employees from suing if they suffer on-the-job injuries. The coverage does provide a strong deterrent to suring, however, and employees usually can’t file both a claim and a lawsuit.
Most workers compensation policies have a clause that requires employees to waive their right to sue if they file a claim against the policy. Most employees will choose to file a claim, because a valid claim provides expedited and clearly determined compensation. A lawsuit can take years and doesn’t come with the assurance of winning any settlement.
Thus, employees might technically have the right to sue until they file a workers compensation claim. Few choose to sue instead of file a claim, though.
For assistance with workers compensation insurance, contact the insurance brokers at QuieTrack Insurance Services. Our brokers are familiar with the various insurances that lenders and their clients need, and we’ll make sure you get the workers compensation that your business needs.