While workers’ compensation insurance is essential for ensuring your employees are taken care of when an injury occurs, the coverage can be challenging to understand and navigate. Good news, we are here to help!
Recently ICW Group hosted a virtual tradeshow for our policyholders and agents where we touched on numerous work comp-related topics and reviewed our products and services. I led a session talking to customers about what they might NOT know about work comp, including some myths insureds are often confused about. Here is what I shared.
Subcontractors and Workers’ Comp Coverage
Many policyholders have questions about what to do if a subcontractor doesn’t have insurance. One option is to pay additional premium for them. If you don’t take this route, verify your subcontractor has their own insurance. If an injury occurs while performing work for your business and a subcontractor is not insured, you may be liable.
Here’s what you can do to protect yourself:
– When hiring a subcontractor, ask for a certificate of insurance and verify the documentation. Call the listed insurance agency and verify the coverage.
– There are two times you should call the listed insurance agency – when the subcontractor starts working for you AND before you make a payment. You want to make sure the coverage is still valid.
Proper Classification and Separation of Payroll
Payroll separation and establishing the correct classifications are critical. Make sure you are utilizing your agent’s expertise when setting up your policy.
Payroll Separation – Payroll separation is where the payroll of a single employee or worker is separated and applied to more than one workers’ compensation class code. This is common in an industry like construction where a single worker may perform different duties at different times of the year. Records should indicate actual hours worked by each worker in each class code. Estimates or percentages aren’t allowed. If you don’t separate your payroll and your payroll records aren’t in order, the entire payroll will be assigned to the highest rated class code.
Determining Classifications – Are your employees classified correctly? You don’t want to pay more than what’s required, which is why assigning the correct classifications is so important. Do the leg work upfront and work with your agent to review your classifications.
Debunking Work Comp Myths
Myth – Workers’ Compensation only covers lost wages and medical expenses
Not true! Workers’ compensation insurance covers much more than lost wages and medical expenses. In fact, it can cover more than physical injuries. For example, personal property, such as eyeglasses, that are damaged during a workplace accident might be covered. Other potential covered items include:
– Expenses associated with retraining an injured worker for a different career
– Travel to and from medical appointments
– Psychiatric care for mental trauma post-injury. This also applies to those who witnessed a traumatic event
– Funeral costs and death benefits to the employee’s beneficiaries
– Occupational illnesses if an employee gets sick due to a work-related incident or exposure to harmful chemicals or allergens
Myth – Pre-existing conditions are not covered by work comp
This is also not true! Pre-existing conditions are not automatically excluded. Workers’ comp may cover an injury if it is aggravated on the job. Let’s say an employee has a knee that was injured a while back. The repetitive motion of lifting boxes at work causes their knee to reinjure. Their pre-existing condition might be covered. On the other hand, if their job duties cause flare-ups of something like arthritis, it might not be covered.
Take Advantage of Payment Options
As an ICW Group policyholder, you have options in how you pay your premiums. Before your policy is effective, establish what type of payment option you wish to pursue. Your options include:
– Installment plan, which is a fixed payment plan based on the estimated premium of your policy.
– Pay-as-you-go is a plan where you pay based on your actual payroll each month. You will report your payroll online for this plan. The plan also includes a deposit payment collected at the beginning of the policy term.
Both options have pros and cons depending on your business type so, work with your agent to determine what is best for you. We also offer options for making your payment, meaning check or credit card. This can be changed at any time.
Workers’ compensation should not be a mystery. If you’ve got questions, let us know. We are here to help.