What Do You Know About Workers' Comp?

By Chris Crum - Wed, 05/07/2008 - 8:58am.

Survey says not much.

Do you understand your workers' compensation insurance coverage? If you don't, you're not alone.

A recent survey conducted by EMPLOYERS found that 14% of small business owners and executives don't even know who their insurer is.

They're spending money on the coverage without understanding how it works. For example, what they get for their premium payments, or why they continue coverage with a particular carrier.

Many small business owners and decision-makers are relying on state funds, but only 12 states actually offer these funds. I wonder how many of those reporting that they rely on them know if their own states actually offer them or not.

What do you know about workers' comp? In these economic times, you as a business owner should probably be aware of where all of your costs are going, and why they are going there.
A few other interesting highlights from the survey are:

- 75% of decision-makers identify price as their primary motivator for choosing workers' comp coverage.

- 69% ranked their carrier's financial strength as the second most important factor.

- 60% named claims handling as highly important in protecting small business operations in the event of an employee injury, and in helping to return valued employees back to work as soon as they are able.

Sixty percent? That means 40 percent are not so concerned about this. I realize that not all jobs come along with much danger. I'm not exactly in the lions' den myself, but even if you do your best to create a safe work environment, things can happen. I'm not going to go over a bunch of crazy scenarios that lead to your employees' injuries. Just beware. That's all I'm saying.

News Tags: Management, Legal, employees, surveys, finanical, government, Insurance

About the author:
Chris is a content coordinator and staff writer for SmallBusinessNewz and the iEntry Network. Subscribe to SmallBusinessNewz RSS Feeds.

Comments

By Tom Marquardt (SBN reader) - Thu, 05/08/2008 - 9:35am.

Article on Workers Compensation

Chris;

Sir, I just reviewed your article on Workers Comp and could not agree with you more about the lack of knowledge from small businesses and how costly that is to their bottom line.

We can align companies with a solution to the traditional Work Comp cost model that can lower a company’s expenses and add value to their human resource assests.

If you would like to know more, please visit our website below or this link.

http://www.paygoworkerscomp.com/the_peo_advantage.html

I would be happy to discuss this structure anytime with you for a follow-up story.

Thank you for your time and attention.

Make it a great day!

By Chris Crum - Thu, 05/08/2008 - 9:44am.

RE: Article on Workers compensation

Thanks Tom, I'll keep that in mind if I explore this subject again.

By How Workers Comp Can Close Your Biz (SBN reader) - Sat, 05/10/2008 - 2:35pm.

A Quick Word of Warning from an Expert

A quick word of warning - There are two main situations where we have seen Workers Comp cause the premature demise of a business. They are:

Not being familiar with the laws concerning the number of employees that require a Workers Comp policy. You may not have to have Workers Comp insurance with up to five employees in a certain state while other states require a policy with one employee. This is a quick way to hear from the Insurance Commissioner with a cease and desist injunction order.
Similar to #1, an employer that hires subcontractors may be on the hook for a claim if a subcontractor is injured. Make sure your contractors show you a certificate of insurance.

Let's say that you do not have enough employees to require your company to have Workers Comp insurance. You have contracted with a company that has seven employees but does not have Workers Comp insurance. The term that I have coined - The Ladder of Insurance will apply.

The Workers Comp courts will start with the sub and move their way up the ladder of companies until there is Workers Comp insurance or the deepest pockets. What will happen in this case is that the court will rule against you for benefits. So, you do not have Workers Comp insurance? Well, you will need to dig deep and pay cash or sell everything in the business and pay the claim.

Let's say that you do have Workers Comp insurance but the same situation applies. The Workers Comp courts will find you liable as the sub did not have their own insurance. You turn the claim into your WC insurer and THEY DENY COVERAGE. Remember, you did not pay premiums to cover the sub. Once again, it is time to pay straight cash.

Feel free to check out my daily blog at http://www.cutcompcosts.com/www/blog.html or a free list of definitions at http://www.cutcompcosts.com/definitions.html

By Chris Crum - Mon, 05/12/2008 - 7:29am.

Re: a quick word

Thanks for the expert info!

By James Moore (SBN reader) - Tue, 05/13/2008 - 11:15am.

Workers Comp - My Pleasure to Post

I am more than glad to help. We hear from so many small companies that we cannot help save from going out of business in this situation. We hate to see an otherwise prosperous small company go bankrupt because of a technicality in the law. We used to see so many in California tank for this reason.

If anyone ever has any questions on Workers Comp, please give them our contact info. We do not charge a fee to answer a question or two.

By Guest (SBN reader) - Tue, 05/13/2008 - 5:07pm.

Employee leasing, especially truck drivers

Friday last week the Indianapolis Star, the main local community newspaper, ran a story on a workers compensation strategy for trucking operations, where the employees are leased from a specialist company who hire the drivers and shoulder the WC and safety for the employees they embed in the client company operations. Sometimes, they hire staff already working for a private fleet, for example, and lease those employees back to the operating company, and do any future recruiting, screening, hiring, discipline and even dismissals. Shouldering the regulatory and HR aspects of the drivers can be a huge benefit, easing the burden that running a fleet often entails. Driver leasing is not just finding temps or casuals, but can be structured as a long term staffing solution, that is good for the drivers and good for the fleet operation.

http://www.indystar.com/apps/pbcs.dll/article?AID=/20080509/BUSINESS/805090392

By Chris Crum - Wed, 05/14/2008 - 7:26am.

RE: employee leasing, especially truck drivers

Interesting info, thanks!

What Do You Know About Workers' Comp?

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