What Are Compensation Requirements?

Workers Compensation Insurance: A New Way To Protect Your Company

In business, it's important to protect yourself. Not only do you need protection against litigation, you also need to protect your assets from theft, fraud, and other mishaps. If you operate a business, it is likely that you have employees. These employees can be your greatest asset, but they can also become liabilities if they aren't protected.

Employees are generally covered under two types of workers' compensation insurance policies. The first covers injury claims that arise out of and in the course of employment. The second protects the employer from liability for injuries that occur to an employee outside of work.

The type of coverage that protects employers is called indemnity insurance. Indemnity insurance protects the employer from being held liable for workers' compensation claims filed by an employee. It's different from medical malpractice insurance, which protects the employer from lawsuits for medical malpractice claims filed against the employer.

Some states require businesses to maintain workers' compensation insurance, while others do not. Business owners should be aware of the law in their state. In general, the state in which you operate your business will dictate the type of insurance you must purchase to protect your business.

The type of policy that protects the employer from liability is called an employer liability policy. Employer liability policies are designed to protect the employer from claims for injuries that occur outside of work. For example, if an employee suffers an injury in the course of playing a game of touch football, the employer may not be liable for any worker's compensation benefits, but the employer may still be required to pay the injured employee's medical expenses. However, if the employee is injured while riding his motorcycle, the employer would likely be responsible for paying worker's compensation benefits, and the employer may also be liable for damages incurred by the injured employee.

Some states require that employers carry employer liability insurance. You should consult with your accountant to determine whether the state in which you operate requires employer liability insurance.

Workers' compensation insurance is a fairly complex topic. To ensure that you are fully informed, contact your accountant. The insurance will typically be provided through an independent insurance agent. Make sure that the agent you select has experience and expertise in the area of insurance you need. Ask your agent about the different types of insurance policies available and the various options that can be used to reduce your premiums.

What Is Workers Comp Insurance?

The workers' compensation system provides benefits to injured employees who are unable to return to work due to illness, injury or death on the job. There are two main types of workers' compensation insurance: first-party and third-party.

First-party coverage pays benefits to the employees and their families if they are injured or killed on the job. The employer must purchase this kind of coverage. Third-party insurance covers the employer, but not the employee.

Third-party insurance is often called "personal liability" insurance because it protects the employer from lawsuits brought by those harmed by the employer's negligence. If the employer is found to be negligent, the insurer pays the damages awarded to the injured person.

Workers' compensation premiums are based on the total amount of business carried on the policy. The more business a company does, the higher the premium.

Insurance companies that offer workers' compensation usually specialize in one or more types of risk:

• Commercial lines

• Professional liability

• Public entities

• General liability

• Auto

• Life and health