Work Comp Basics

Businesses need workers compensation.  It is often the largest expense for the business so this is something that business owners should pay close attention to. Let’s start with the purpose of work comp insurance.  

Why Do We Need Workers Compensation

Workers Comp Insurance is there to protect your employees if they become injured on the job. Work Comp will pay for medical bills as the result of a work injury.  They will also pay for lost wages as a result of your employee being unable to work for a period of time.   

Work Comp Coverage

There are two parts to Workers Compensation Insurance.  Part 1 covers the benefits your company is required to pay under state law. There is normally no limit to this coverage. The insurer will pay all compensation and medical benefits your company is legally obligated to pay under your state’s workers’ compensation statutes.  Part 2 or coverage B is Employer Liability.  The Employers Liability limit is there in case a spouse or dependent of an employee decides to sue an Employer. This limit may also be used when an injured employee sues a third party and the third party turns around and sues the employer.   

There are not only the direct cost of the work comp policy that affect your business.  There are many indirect costs that may affect your business. These can be; you may have to train replacement employees, adjust work schedules, investigate accidents and implement corrective measures. You may lose productivity, have to repair damaged equipment and property, and deal with lower employee morale and absenteeism.

How To Save On Workers Compensation

Controlling Work Comp Costs are Important to your bottom line.  Here are two ways that you can help control costs; Setting Up a Safety Program and Building a Return to Work Program.  

Setting Up a Safety Program — Many injuries can be prevented before they occur.

Having a safety program helps you identify and eliminate workplace hazards that may cause accidents.  In most cases an investment in a Safety Program greatly help prevent significant workplace injuries.  

Putting standards and procedures on paper shows that your company is committed to providing a safe work environment for employees.

Return to Work—  The goal of a return-to-work program is to help injured employees get back to work as soon as possible, even if its a part time, reduced role than they had before they were injured. 

An active return-to-work program can also have indirect cost benefits. It can help you maintain a relationship with injured employees. And an early return-to-work lowers the chance that the employee will never return.

Having a Work Comp Deductible. A deductible will mean that you pay your deductible before the claim is filed. The Workers Compensation deductible is typically $1000 or higher. This will save you a little of your workers compensation policy. More importantly, it can help save in the long run by keep small claims off of your workers compensation policy. This will greatly help with your experience modification factor. Your experience modification factor is set by the state that your business resides in. This can be a large discount off of your work comp policy.

Your Workers Compensation policy is different than most of your other insurance policies. It is something that should be managed a little more. By working with your insurance agent, you can help reduce some of these costs. For more information, please reach out to me with any questions that you have. Our short form contact information is below or you an schedule a phone call on my calendar. Email is

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Are you ready to save time, aggravation, and money? The team at Ameriguard Insurance Agency is here and ready to make the process as painless as possible. We look forward to meeting you!

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