New York is a very expensive state to start a business, but bold entrepreneurs launch new companies in the state every year. One of the most important business expenses is workers’ compensation, which pays for on-the-job injuries and for the time injured employees are unable to work. Here are important points for business owners to know about workers’ compensation in Nassau County.
Types of Workers’ Compensation Benefits
Workers’ comp helps businesses steer clear of expensive legal costs as the insurance company picks up the bill on claims filed by employees. Here are some of the main benefits that workers’ comp offers to businesses and employees:
Medical treatment – pays for hospital visits and medicine. If the medical bills exceed the coverage limits, the worker may seek to recover the balance through a lawsuit.
Vocational rehabilitation – provides training for going back to work. Some workers become disabled from their injuries and aren’t able to return to work for several months. During that time, they may forget certain job activities, so they need to relearn them.
Disability benefits – pays workers when they are disabled due to a workplace incident. The plan provides lifetime benefits in the event of severe injuries that lead to permanent disabilities.
Death benefits – are paid to family members of a deceased worker who suffers a fatal injury on the job. It also pays for funeral expenses.
Employer liability – covers negligence caused by the company.
Court and attorney costs – covers the costs of lawsuits filed by employees
General Liability Vs. Workers’ Compensation Insurance
New business owners often get confused between different types of insurance until they discuss their needs with the experts. General liability, for example, is sometimes confused with workers’ comp. The key distinction is that general liability pays for injuries that occur to visitors at a business location, while workers’ comp pays for injuries to in-house staff members while at work.
If a New York state resident decides to take a job outside the state, the employer is not required to carry NY state workers’ comp as long as the employee’s work is outside of NY. Entrepreneurs who plan on launching a startup that involves workers’ compensation near NY or within the state should talk with an insurance expert about special employment arrangements. Find out your coverage options before hiring any workers.
Workers’ Compensation Insurance Requirements
About 20 percent of small businesses are legally required to carry workers’ compensation insurance, according to the U.S. Small Business Administration. These legal requirements exist at the state level and differ among states. Certain exemptions exist in each state, but in most cases, heavy penalties are applied to employers that don’t comply with state law. Securing workers’ compensation in NY is imperative for companies not only for legal reasons but to build a trustworthy reputation for attracting talent.
Do Business Owners Need Workers’ Compensation?
In general, a person who works independently doesn’t need workers’ comp, whereas every business that hires employees does. Instead, an individual should consider other insurance options, such as a healthcare plan that covers accidents that may occur while working. The state determines which small businesses qualify for special workers’ comp plans.
Keep in mind not every state defines “employee” the same way. New York defines the term as “any person employed for hire by an employer in any employment.” The law also specifies that an “employer” in the state does not apply to a government agency. All commercial employers with employees must carry workers’ comp, and certain non-profit organizations also need to do so.</p.
Workers’ Compensation Insurance Cost
Workers’ comp costs vary among businesses since many plans are tailored to fit a specific operation. Each state sets policies that shape cost factors through the state’s rating agency or bureau. The top factors include class code, business location, payroll, and claims history.
Insurers are further required by law to factor an experience modifier into premiums. The experience modifier is a rating of the firm’s workplace safety compared with organizations in the same class code. Insurers assign businesses to class codes that define workplace risk levels.
Premium costs hinge on payroll data and the cost of living in the state. Businesses located in a state with a high cost of living, such as New York, usually pay higher workers’ comp premiums.
How to Buy Small Business Workers’ Compensation Insurance
Many entrepreneurs simply type “NY workers compensation near me” on Google and pick the first link. This effortless method can lead to mixed results. Here are four important steps to take while purchasing small business workers’ comp insurance:
Learn about New York’s workers’ comp requirements – It requires coverage for businesses that employ one or more employees.
Calculate your gross payroll – Use this data to figure out which employees should be covered by workers’ comp.
Select an insurer – Choose an insurance agency licensed in New York State specializing in workers’ comp plans.
Contact the insurer and request a quote – Be prepared to provide the agency with your EIN and payroll numbers.
Other options you can pursue are self-insurance and the NY State Insurance Fund (NYSIF), which is a non-profit state agency that offers workers’ comp. The agency must provide insurance to all employers that apply for coverage except firms that owe money to the fund.
Before launching a startup, make sure you meet state requirements to provide workers’ compensation in Nassau County. It’s wise to be clear and precise on the details of your plan, which can be clarified by one of our experts. Contact us at Northeastern Group, LTD for more information about workers’ compensation and the right plan to make it work for your business.
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