How to Find the Right Workers' Comp Coverage

Haley Bass05/10/2017

Once you know your state’s requirements for workers’ compensation, it’s time to take action. If you need workers’ compensation insurance for your business, there are a few factors to consider.

  • Any other insurance you have to cover your business, even a business owners’ policy (BOP), isn’t going to take care of your workers’ comp needs. You’ll need to purchase a separate insurance policy.
  • Workers’ compensation is fully regulated and run by states. In addition to establishing their own laws and regulations, each state can also dictate where employers can buy workers’ comp insurance.
  • The premium for workers’ comp insurance is based on your industry’s classification code and payroll. More dangerous industries, like construction and manufacturing, are likely to have higher premiums than an accounting firm, for example.

There are two ways to get workers’ compensation insurance: a private insurer, or your state’s workers’ compensation fund. In some states, employers are required to purchase their workers’ comp insurance from the state fund. Most states give employers the option to buy from either the state fund or from their choice of private insurer.

If you have a choice, here’s a look at your options:

  • Private Insurer: Working with a private insurer lets you choose the best option for your employees’ needs. There are typically several options available, and the competitive nature of the private sector gives you the power of comparing prices and coverage. Working with an agent also helps you choose and understand the coverage that offers the best value.
  • State Fund: If a small business can’t get coverage from private insurers, they’re guaranteed a policy from these funds if it’s an option in their state. Twenty-two states have their own competitive workers’ compensation fund, which supply approximately 25% of all workers’ comp policies. You can see a list of competitive state funds on the International Risk Management Institute’s website.

In terms of preparing to handle a work-related injury, buying workers’ compensation insurance is only half the battle. The next step: find an occupational medicine provider.

Although an employer is required to seek medical treatment for their injured worker, there’s no specification as to what kind of physician is necessary. But not using a work health expert could cost you more time and money than necessary.

Consider this – sending an injured worker to a general practitioner is like using a newspaper to protect yourself from the rain: it might work in a quick pinch and for a short time, but it’s not entirely effective. You need a sturdy umbrella, or an occupational medicine provider experienced in treating work-related injuries.

When looking for an effective occupational medicine provider, you want to find a partner that will help you manage the entire workers’ compensation and injury care process. Your provider should not only be able to effectively treat work-related injuries, but have in-depth knowledge of the workers’ compensation system, and your state’s specific regulations.

There are a few other qualities that separate an effective occupational medicine provider from an ineffective one.

Does the provider:

  • Use evidence-based treatment methods for quality care?
  • Promote a quick return to work?
  • Treat your employees like industrial athletes, with an active treatment philosophy?
  • Rely on physical therapy for long-term recovery rather than quick-fix opioids?
  • Offer a single location for all aspects of care?

Make sure to interview multiple providers and know your options before making a decision. While you hopefully never have to deal with a workplace accident, it’s good to know that your employees will be taken care of if the time comes.

To learn more about what makes a good provider, read our whitepaper on the 10 essential elements of an occupational medicine program.