Every business should obtain workers’ compensation benefits. It provides financial coverage for an employee’s medical costs and lost wages when an employee is injured on the job. This insurance helps to protect the employee and the company from costly bills that can arise from the treatment of workplace injuries.

Getting a Workers’ Compensation Policy for Your Business

While getting a workers’ compensation policy for your business is fairly straightforward, you may need to ensure that you know the coverage level needed and insurance costs before deciding on a particular plan. Speaking to an agent or broker can help you to determine the right coverage level to protect your company. Some factors that can influence a workers’ compensation policy are:

  • The number of employees present

  • Types of employees

  • The nature of work of the employees

  • Payroll size

  • State regulations

Many states in the US require workers’ compensation coverage for all businesses. It is crucial for individuals to check state laws and know what the regulations are so that they can remain in compliance. Every state decides the type of companies that should carry coverage and where to get that coverage. Here are some of the options, depending on the state regulations:

  • Private insurance companies:

    Every state regulates private guarantors. However, they don’t determine the price or approval of customers. Private insurers usually offer good rates and better customer service compared to state-funded options.

  • State-funded insurance:

    Some states offer state-funded workers’ compensation coverage for employees. There are two main types of state-funded workers’ compensation.

  • Monopolistic state-funded:

    There are states in the United States like Washington, Wyoming, Ohio, and North Dakota that only give businesses one option to get coverage via their state-funded programs. In these states, private guarantors cannot be consulted.

  • Competitive state-funded workers’ comp:

    Most states offer this option. It means that they allow private guarantors and also compete with them by providing state-funded coverage for employees.

How Much Does Workers’ Comp Insurance Cost for Small Businesses?

The price of insurance for small enterprises varies. Some businesses pay an average amount of $560 annually, depending on the guarantor. According to the National Safety Council, the median cost for workers’ comp insurance for a business claim is $40,000. However, higher-risk businesses, such as those in the construction industry, pay a higher amount for workers’ compensation coverage.

How Does Workers’ Comp Work for Small Business?

Small businesses can get insurance through state-funded programs or via private guarantors. If you decide to get workers’ comp from a private insurance carrier, you can go directly to an insurance company or via a broker or agent.

There’s a difference between a broker and an agent, but they both sell insurance. An insurance agent sells policies from various companies, while a broker represents the consumers searching for the best policy that fits their needs.

Workers’ comp for business may require you to get the following information:

  • Name and description of the business

  • Federal employer identification number (FEIN)

  • Location(s)

  • Number of employees

  • Desired start date of coverage

  • Workers’ comp claims history.

One of the most important points to consider is the state regulation regarding workers’ compensation insurance coverage. Private insurance companies offer the best rates and are usually preferred over state-funded workers’ comp.

At Northeastern Group, we work with businesses in New York, New Jersey, Connecticut, Pennsylvania, Georgia, and Florida to provide workers’ compensation for business. Contact us today to get started. We look forward to working with you.

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