Workers’ compensation is critical for businesses to protect their financial well-being and their employees’ well-being. You risk facing significant fines, lawsuits, and even bankruptcy without it. So, it’s best to stay compliant and show your employees that you got their back in the unfortunate event that working for you causes injury or illness. After all, your company couldn’t quite function without them, so you should do your due diligence to ensure that you have the best policy for your team.
Who Needs Coverage?
Indiana requires most businesses with one or more employees to carry a workers’ compensation policy. It covers employees within the state, outside the state, and even yourself. However, there are certain exceptions. For example, you don’t necessarily need coverage if you’re a sole proprietor, independent contractor, or a party in a partnership. Also, keep in mind that your primary health insurance could deny a claim for work-related injuries.
While most employers need to carry a workers’ comp policy, there are a few exemptions, including but not limited to:
- Real estate agents
- Agricultural workers
- Those qualified for federal workers’ comp
Even if you’re exempt from holding a policy, you should ensure that you can financially handle the risk of an injury on the job if your health insurance doesn’t cover it. Additionally, you should consider your employees. They may not be able to cover the costs, and you don’t want them to face the financial burden of a severe injury because of something that happened while they were working for you.
The cost of your Indiana workers’ comp coverage can depend on several factors:
- Employee wages
- Claims history
- Industry risk level
- Number of employees
You can most likely expect higher premiums in a high-risk industry, like construction or trucking. In addition, if you have a significant number of claims, your rates will probably be higher because you’re a considerable liability to the insurance company. If your company has a hefty claims history, consider taking steps to improve workplace safety. It will keep both insurance and turnover rates down.
Workers’ compensation can cover the cost of an employee’s medical expenses and lost wages due to a work-related injury, illness, or death. Depending on your policy, it may also prevent employees from filing a lawsuit against the company since they would be covered under insurance.
The types of disability payments include:
- Temporary Partial Disability- TPD payments are for employees who can work under a limited capacity
- Temporary Total Disability- TTD is for employees who cannot work while recovering.
- Permanent Partial Disability- PPD payments are for employees who are permanently impaired due to a work-related injury but can still work under limited capacity.
- Permanent Total Disability- PTD is for employees who are disabled and can no longer work because of the injury.
When the employee is injured, they can seek medical attention immediately and report the injury to you within 30 days. Once you receive the report from the worker, it’s your job to note the injury to your insurance company within seven days. Failure to file in time can lead to a denied claim. Once your insurance company receives the claim, they’ll investigate the case and usually decide within 29 days whether they will approve it.
If you qualify and choose to self-insure, you should be able to prove that your company is financially stable and meet the Indiana self-insurance requirements. In addition, there are several benefits to self-insuring, including:
- Saving money on insurance premiums
- Dealing with injury claims yourself
However, there are some significant downsides to self-insurance, which include:
- Paying out of pocket for employee injuries and lost wages
- Possible exposure to lawsuits if employees are unhappy with your compensation
Purchasing a Policy
Before you purchase a policy, you need to consider a few things:
- Have you done all that you can to improve workplace safety? You may not have as many claims if you provide safer working conditions. This will keep premiums down.
- Do you have a legal team to help you ensure that you’re fully compliant with Indiana’s insurance standards?
- Compare policies between carriers and ensure that you’re getting the advice of a lawyer throughout the process so you’re getting fair premiums and quality coverage.
Buying workers’ compensation doesn’t have to be a complete hassle. So if you’re required to carry a policy, you should ensure that you’re getting adequate coverage for a reasonable price. On top of workers’ comp, you should consider additional insurance, such as general liability, to cover the expenses of a customer injury.
Getting the bare minimum to fulfill legal requirements may save on business costs short term. However, if a customer is severely injured on company property, you could face costly lawsuits that put your business at risk. So determine what accidents you can afford, and get insurance to cover those that would cause you to sink.