Worker’s Compensation Insurance

Employers and workers around Glen Rock, New Jersey benefit from the basic no fault agreement that generates the workers’ compensation line of coverage. Employees no longer need to sue their employers for medical benefits incurred from on the job injuries, and employers can better budget this unknown and potentially costly risk. Workers’ compensation coverage is required for all employers.

Whether your company incorporates, operates as a Sub S corporation, proprietorship, or partnership, the operation must cover employees for injuries on the job. Workers’ compensation covers loss of time due to disabilities as well.

What’s Covered

Traditional claims include cuts, falls, injured backs or broken bones, or any injury arising in and out of the course of employment. However, workers compensation includes coverage for industrial diseases too.

Who’s Covered

So, what employees are covered? This coverage extends to all employees and independent contractors who do not have their own policy. An owner directly manages employees, controlling their time and activities. Independent contractors control their own activities, and the relationship is temporary.

Why is the distinction between employees and independent contractors important? Employees are covered automatically and the workers compensation premium is based on payroll. Executives can opt in or out for coverage on their own activities. Independent contractors usually supply their own coverage, but if they don’t, the employer pays a premium based on gross pay to the contractor. Employers need to understand their responsibility to independent contractors and insist on proof of coverage before contracting work to an independent.

So, even without employees, the company that utilizes independent contractors needs workers’ compensation protection.

Employers’ Liability

Rarely used, this coverage is important because it considers some rare circumstances. Suppose an employee is injured by his employer’s defective product, say a drill press. The employee would first be covered by workers compensation, and then if he sued his employer for product liability, employers liability would pay the difference.

Suppose a medical worker contracts hepatitis and then passes the disease to a family member. The worker is covered by the workers compensation, suits brought by the family member is covered by employer’s liability. For the employer, legal costs are covered.

Helpful Tips

Since the workers compensation premium is based on payroll, some administrative costs can be reduced simply by timing the quarterly payroll reports with the expiration date of the policy.

How to control your workers compensation costs.

• Pay close attention to separating payroll by job duties.
• Separate overtime pay and bonuses.
• Require independent contractors to supply Certificates of Insurance, proving their own coverage.
• Keep OSHA logs to help manage injury prevention.
• Listen to loss control experts.
• For an easier audit, move your expiration date to a calendar quarter.
• Ask your Donnelly and Sproul agent for guidance.

Many insurance companies will negotiate premiums based on handling several policies for the same risk. One way to reduce costs: have your Donnelly and Sproul agent review your general liability, business auto policy, property coverage, umbrella liability, or business owners’ policy together with the workers’ compensation.

Call us today at 201-493-9002 or email to discuss how we can help with your workers compensation insurance!