Insurance can be very confusing. Knowing what policy covers what exposure can be overwhelming. I would like to provide a simple explanations to the various types of Insurance coverage companies may have. Insurance is like a puzzle and policies are written to cover specific types of exposures. You need to make sure you are not missing a piece.
What is Workers’ Compensation?
Workers’ compensation is a type of liability insurance that provides benefits to employees after a work related injury and are generally in force for a year. It is designed to be the sole remedy for an injured employee. All California employers are required to have this coverage. It provides numerous benefits to an employee that is injured while working. Medical care costs for first aid, hospital visits, ambulance transportation along with numerous other types of medical costs are paid by the insurance carrier. If the injury is sever enough that the employee is not able to work the carrier will provide benefits which may be temporary or permanent. The benefit amount paid to the injured employee depends on the injury and their salary. Retraining may be paid for if an employee is not able to do the same job after they heal.
An owner of a company may elect to be excluded from the policy to keep cost down while independent contractors may be eligible for coverage though the owner’s business policy. This is often misunderstood and insurance carriers are starting to require independent contractors prove they have coverage elsewhere or be added to the owner’s policy. Temporary and part time employees are entitled to these benefits as well. You do not have to be a legal resident and it does not matter if the accident was your fault.
DID YOU KNOW?
It is illegal to be fired due to a work related accident that results in a claim being filed.
How is a Premium Rate Determined?
Premiums are calculated by taking the annual payroll by type of job, multiplying it by the premium rate for the job and then dividing by one hundred. There are assessments added to the entire premium which average about 3.75% of the premium. Job types are referred to as class codes which will have a premium rate assigned to it. Class codes in California are established by the Workers Compensation Insurance Rating Bureau. They are not always easy to determine and may depend on the environment of the job such as a physical barrier between different operations such as clerical and manufacturing.
Long Term Injuries
Injuries that develop over long periods of time, such as carpal tunnel syndrome, can be from numerous employers. If an employee has been working at a computer for twenty years at various companies and develops carpal tunnel this could be a cumulative trauma injury and the prior employers could be pulled into this claim.
Most claims can be avoided!
Having a safe workplace and being aware of what is happening in your company will minimize claims. Hiring the right people for the job and training them properly will minimize your claims. Make sure that all supervisors know what to do before and after a claim and report them right away.
Workers compensation insurance can become a very complex. Experience modification rates, medical liens, fraud, the judicial system, and skyrocketing medical costs are the most common areas that put your company at greater risk for higher insurance costs
We can help you put all the pieces into place. Give us a call at 626.568.9933. Ask for Geoff.