Worker’s Compensation Insurance Explained
What is Worker’s Compensation Insurance?
Worker’s compensation insurance is a policy designed to protect your employees if they are injured on the job and you, as the employer, if you are sued as a result of an employee being injured.
If Worker’s Compensation Insurance is Not Required in Texas, Why Do I Need it?
Although worker’s compensation is not required of most private employers in Texas, it is highly recommended. We all know accidents happen and worker’s compensation insurance just helps protect your business from any financial loss as a result. Imagine one of your employees falls off a ladder and breaks their back. They require surgery and 4-months of leave to recuperate and go through physical therapy. They don’t have any insurance, so they engage an attorney to sue you. You could be held responsible for the medical costs, lost wages, and legal fees.
If you are a private employer and do any types of government contracts it will be required. We have also noticed more and more companies are requiring their subcontractors to carry this coverage, along with additional coverage for waiver of subrogation, which prevents the company contracting out work from being held responsible for a subcontractor’s injured employee.
What Does Worker’s Compensation Insurance Cover?
- Medical care for your employee if they are injured or get sick as a result of their job.
- Employee’s lost wages as a result of not being able to work as a result of their injury or illness.
- Your liability in case a lawsuit arises as a result of the injuries.
How is the Cost of Worker’s Compensation Insurance Determined?
Number of employees and they will want this broken apart via part time and full time.
- What the employee’s job duties are – the riskier the job, the more the coverage costs.
- How many employees do you have for each of the job duties and broken apart by full-time and part-time.
- Total salary for each job duties
- Once you have had coverage for a while, your loss history and EMOD (Experience Modification Rating*).
*An EMOD is a numerical rating that reflects your experience vs. other companies in your industry. The higher the EMOD, the higher your premium will be.