Workers’ Compensation Insurance
The right workers’ compensation solutions can accelerate profitability by identifying new opportunities to reduce insurance costs and minimize unexpected premium volatility.
Highly-Publicized Examples of Workers’ Compensation Insurance at Work
- The gig economy is growing and employees are paid through a 1099-MISC tax form as an individual contractor. However, in several incidents, courts ruled that employees who were paid as an individual contractor are misclassified and should be compensated through the workers’ compensation fund.
See: Risky Business: What happens when gig workers get injured on the job
- A former SpaceX worker claimed that he was exposed to toxic chemicals that caused a brain aneurysm.
See: SpaceX worker’s lawsuit against machinery company, alleging toxic chemical exposure, can go forward, judge rules
- The estate of an Intel contractor sued the company alleging its negligence resulted in him being crushed to death inside a manufacturing tool last year. His mother and daughter sought $995,000, plus unspecified medical and burial services from Intel.
See: Intel sued for $1 million in worker’s factory death
- New York Mets pitcher Matt Harvey had to have right elbow surgery. A partly torn ulnar collateral ligament is considered a workplace injury, just as if he were a truck driver hurt on a loading dock. Therefore, the surgery and recovery were paid for through workers’ compensation insurance.
See: Mets’ Harvey Is Covered Like Any Other Employee With a Workplace Injury
- McDonald’s employees across the U.S. alleged they were seriously burned at work and not given first aid.
See: McDonald’s workers allege unsafe working conditions
When compiling a list of the most common injuries that can occur at the workplace, most of them can be grouped into three categories: overexertion, contact with objects or equipment, and slips trips or falls.
This detailed survey conducted in 2018 gives insights into the top eight most common injury types occurring on the job last year:
Workers’ Compensation Insurance Costs
“Is it expensive?” might be the first question most business owners have about workers’ compensation insurance. The answer varies greatly from state to state.
Generally, there are three factors that will determine your workers’ compensation premiums:
The biggest single driver of workers compensation premium fluctuations is the Experience Modification Rates, also known as XMods. The XMod is a mathematical formula that insurance carriers use to compare similar businesses. An insurer compares a company’s estimated losses to actual ones over a three-year period, then assigns a number rating, with the hypothetical “average” being 1.00.
If a company has more losses than average, the score climbs above 1.00, thereby “taxing” the business for past claims. If a company outperforms its peers in safety, with fewer claims, the score drops below 1.00 and counts as a “credit.” The Inspection Bureau, which promulgates experience modifications, does occasionally make mistakes. It’s advisable to review the worksheet yearly to confirm accuracy. This is yet another reason why working with an experienced and knowledgeable broker who’s committed to protecting your business from excessive costs is highly recommended.
Now that you understand the basics of workers’ compensation insurance, you may be wondering where to go from here. The best thing to do now is to chat with one of our expert brokers to help you find the right coverage for your business. We’ll also help you explore past claims and correct any historical errors on your XMod with significant premium savings. Get started by creating an Embroker account today.