Workers Compensation Insurance

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There are a lot of different types of businesses, and each workplace comes with its own set of risks. As a business owner, you want to ensure that you have sufficient insurance coverage for every possible situation that your enterprise might encounter. Not every company needs every type of business insurance coverage. However, one policy that is common to all businesses is workers compensation insurance.

What Is Workers Compensation?

Workers compensation is a special type of insurance that covers both employees and employers in the event that a worker is injured in an accident, becomes ill, or suffers loss of life while on the job. Even the most menial of tasks contain certain risks, and employees in every position should be properly covered. Workers compensation also provides coverage in the event of other incidents that might occur while on the job, such as natural disasters or workplace violence.

Who Needs Workers Compensation Insurance?

Each state has unique workers compensation laws. Generally, any business with at least one non-owner employee is required to maintain workers compensation insurance coverage. When your business is ready to hire its first employee, whether part-time or full-time, you need to check on the laws for your state and obtain workers compensation at that time. Most states impose stiff penalties for neglecting to carry workers compensation insurance. If the business consists completely of owners and has no non-owner employees, the coverage is usually not required but may still be optional.

What Does Workers Compensation Cover?

Workers compensation covers an employee’s medical treatments, costs for rehabilitation, loss of life coverage, and possibly even lost income, if they are injured or become ill while performing their duties on the job. It also usually protects employers from civil suits by employees who receive benefits from the coverage.

Workers compensation only covers injuries or incidents that occur while an employee is on the job. It does not cover incidents that may occur when employees are on their own time, even if they are visiting the work location.

Handicapped businesswoman with injured wrist wearing a neoprene wristband working at office

Obtaining Coverage

Every business owner wants their enterprise to be fully covered against any unexpected accidents, incidents, or illnesses. An uncovered claim against your company could be catastrophic to your business’s operation, and sometimes to the owners themselves. Our professional agents can work with you to review your current business insurance protection, determine your strengths and vulnerabilities, and provide a recommendation for the package you need to be properly covered. Contact us today and let us get your business protected.

Massachusetts Workers Compensation Insurance FAQs

Workers compensation insurance helps protect both employees and employers when an employee is injured, becomes ill, or suffers a work-related accident while performing job duties. It can help pay for medical care, rehabilitation costs, lost wages, and other covered benefits. It can also help protect employers from certain employee lawsuits related to workplace injuries.

Yes. In Massachusetts, most employers are required to carry workers compensation insurance for their employees. This applies even if a business has only one employee or has part-time employees. The main exception is for domestic employees, who generally must work at least 16 hours per week before coverage is required.

Businesses with employees typically need workers compensation insurance. This can include small businesses, contractors, retailers, restaurants, professional offices, nonprofits, and many other types of employers. If your business hires full-time, part-time, or seasonal employees, you should review your workers compensation requirements before work begins.

Yes, small businesses in Massachusetts generally need workers compensation insurance if they have employees. The size of the business does not remove the requirement. Even a business with one employee may need coverage, which is why new employers should arrange workers compensation before hiring.

Workers compensation insurance may cover medical treatment, rehabilitation, a portion of lost wages, disability benefits, and death benefits after a covered work-related injury or illness. It is designed for injuries or illnesses connected to the employee’s job duties, not injuries that happen on personal time.

Workers compensation insurance usually does not cover injuries that happen outside of work, intentional injuries, certain self-inflicted injuries, or claims unrelated to job duties. It also does not replace other business insurance policies such as general liability, commercial auto, professional liability, or cyber liability.

The cost of workers compensation insurance depends on several factors, including your industry, payroll, employee job classifications, location, claims history, and coverage requirements. Businesses with higher-risk work, such as construction or physical labor, usually pay more than lower-risk office-based businesses. Payroll and class codes are major factors in calculating premium

Workers compensation premiums are usually based on your payroll, employee classification codes, business operations, and claims history. Each job classification reflects the type of work employees perform and the risk level associated with that work. If payroll or job duties are estimated incorrectly, the final premium may change after the policy audit.

A workers compensation audit is a review of your actual payroll, job classifications, and business operations after the policy period ends. The audit helps the insurance company compare your estimated payroll with your actual payroll, which may result in an additional premium owed or a refund.

Common audit records may include payroll reports, quarterly tax filings, employee job descriptions, officer information, subcontractor payments, 1099 records, and certificates of insurance from subcontractors. Keeping accurate payroll and subcontractor records can help avoid unexpected audit charges.

Subcontractor rules can be complicated. Many general contractors require subcontractors to provide proof of workers compensation coverage before work begins. If a subcontractor does not have proper coverage, the hiring business may face additional premium charges during a workers compensation audit.

A workers compensation certificate of insurance is a document that shows a business has active workers compensation coverage. Contractors, property owners, vendors, and clients may request a certificate before allowing work to begin. Businesses that hire subcontractors should keep current certificates on file.

A Massachusetts employer that is required to have workers compensation insurance can face serious penalties if it operates without coverage. The Department of Industrial Accidents may issue a Stop Work Order, and fines can continue until proper coverage is obtained.

Yes. Workers compensation insurance helps employees receive benefits after covered work-related injuries, but it also helps protect employers. In many cases, workers compensation can limit certain civil lawsuits by employees who receive covered benefits for workplace injuries.

Yes. Banas & Fickert Insurance Agency can help Massachusetts businesses review workers compensation coverage, understand policy options, prepare for common requirements, and request a personalized quote. To discuss coverage, call 413-527-2700.