Workers Compensation

All states require employers have some form of Workers' Compensation insurance. It’s the law. It pays for medical care and rehabilitation for employees and principals of companies eligible for coverage, who are injured on the job or contract a work-related illness. Workers' compensation also covers a portion of an employee's lost wages, disability benefits. It also provides death benefits for the dependents of employees killed in work-related accidents.

Workers' compensation covers all of the employees of a business except independent contractors (some states require coverage for independent contractors you hire-check with your insurance professional for resources to determine your situation). Special provisions must be made if employees work out-of-state or out of the country. If the employee dies because of the injury, the insurer pays death benefits to the worker's dependents.

All Workers Comp rates are based on the classification code of that job class. For example, an administrative assistant or clerical job class code is 8010 and for every $100 of annual payroll paid, Workers Compensation average insurance rate is $2.00 per $100 of payroll (this is an example, rates vary carrier to carrier and year to year). The higher risk occupational classes (like construction workers) and claims rate, the higher the cost. So if your admin assistant is earning $40,000 per year, you will pay $800.00 in annual Workers Comp premiums. There are hundreds of class codes for every type of job occupation. Your insurance professional will ask you for the total annual payroll paid for each job class.