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What is workers’ compensation insurance?

Burns, broken bones, electrocution, severe cuts or lacerations, head, brain or spinal cord injury, these are just some of the accidents that can, and do, happen to employees, making workers’ compensation insurance one of your business’ most important insurance needs.

One reason for prioritizing this insurance is obvious – workers’ compensation is federally mandated insurance coverage that employers must purchase to protect their employees on the job and while performing work-related tasks.

However, state to state, who has to buy workers’ compensation insurance, the amount of benefits, what impairments and injuries are covered, how impairments are to be evaluated and how medical care is to be delivered can differ quite drastically.

For example, many states exempt employers with only a few employees from mandatory coverage laws. In Massachusetts, though, it doesn’t matter if you have only one employee, if that person only works a few hours a day, or if that person is a family member; you must have workers’ compensation insurance for them.

Beyond workers’ comp being mandatory, there is another excellent reason why it is such critical protection for you to have. In the event an employee gets a work-related injury or illness, this coverage can help keep your business from experiencing extreme financial hardship as a result of a claim.

That’s because workers’ compensation insurance pays:

  • Medical Expenses including ambulance rides, emergency room visits, and anything else that is necessary to diagnose and treat an employee’s injury
  • Temporary Disability to workers who need to take more than five days off work due to their injuries until they can return to work, have reached maximum medical improvement, or have received three years of payments
  • Permanent Incapacity Benefits if an employee’s doctor finds them permanently disabled
  • Partial Incapacity Benefits to employees who return to work but earn less due to their injury
  • Specific Loss Awards for permanent loss of function to certain body parts
  • Disfigurement Awards for scarring to the face, neck, hands or other bodily disfigurement
  • Additional Benefits including mileage reimbursement for travel to and from doctors’ appointments, vocational rehabilitation, death benefits if a worker passes away due to an on-the-job injury, and funeral expenses up to a limit

Workers’ compensation is a no-fault insurance policy, so these benefits will be paid out regardless of whether an employee, an employer, a coworker, a customer, or some other third party is at fault for the incident that caused the injury to happen.

If you didn’t have a workers’ compensation policy in place, though, you would likely have to pay out-of-pocket for all of these injury-related expenses. With today’s exorbitant health care costs, your price tag could quickly skyrocket to six figures – or higher.

While workers’ compensation insurance is a vital investment for your business, it’s just as important to find a local South Shore insurance agent to partner with. At Austin Insurance, we are deeply familiar with the specific coverage laws of both Massachusetts and neighboring states like New Hampshire and Maine. This means we can not only help you understand how the complex workers’ comp system operates, but also assist you in keeping your premiums as low as possible.

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Why Workers’ Compensation might make sense for your sole proprietorships or limited liability partnership

Workers’ compensation is not retroactive insurance – it’s far too late to invest in a policy post-accident. At that point, if you don’t have the proper insurance, you can be held financially liable for your employee’s injuries. Additionally, the Department of Industrial Accidents, which oversees Massachusetts’ workers’ comp system, has the right to order you to close down immediately and pay hundreds of dollars in fines per day. It is also possible that you will face criminal charges, including up to one year in prison and/or up to a $1,500 fine upon conviction.

Companies that don’t have employees and are structured as a sole proprietorship of an unincorporated business, a limited liability company, or a limited liability partnership have the choice, not the obligation, to get this coverage. For this reason, many smaller business owners often overlook the power of having a workers’ comp policy in place.

From Austin’s perspective, these types of organizations may still want to give workers’ comp insurance strong consideration for three main reasons:

  • It’s Critical Coverage for Your Work-Related Injuries. If you were injured on the job, then your workers’ comp policy could help pay for medical expenses and replace lost wages, whereas health insurance is only applicable to non-work injuries. In fact, most health insurance providers exclude coverage for injuries and illnesses that would be covered by workers’ comp. With the right workers’ compensation policy, you can also have peace of mind that you will be covered for medical expenses related to any overuse or misuse injuries that have developed over a long period of time. You may also receive benefits for some illnesses and diseases that are the gradual result of your work conditions, such as heart conditions, lung disease, and stress-related digestive problems. And, finally, you may even be covered for injuries while traveling on business, doing a work-related errand, or attending a business-related social function.
  • Having Workers’ Comp Insurance Might Help You Nail That Lucrative Contract. Many companies today require contractors to have their own workers’ comp insurance. Your potential customers don’t want the financial liability of your injuries hanging over their head. So, if you have workers’ compensation coverage from the start of your relationship with a customer, it may just give you that leg up you need to get hired versus another contractor who does not have this insurance already in place.
  • You Will Be Less Susceptible to Substantial Fines and Other Penalties from The State. If you’re a contractor who sometimes hires subcontractors, then the state of Massachusetts might consider these people “employees” even though you don’t see them that way. If the state does classify your subcontractors as employees – part-time or full-time – and you don’t have workers’ compensation in place, you will likely be charged several hundreds of dollars a day in penalties as well as be held financially responsible for injuries they suffer while working for you. Even if you hire subcontractors who have their own workers’ comp coverage, you might still be viewed by the state as responsible for covering them with your own workers’ comp.

At Austin Insurance, the last thing we want any business owner to do is spend money on something that they don’t need. However, we also don’t want to see you cutting corners by ignoring important protection that might help keep you and your company afloat should you ever go down with a work-related injury or illness. Our local and knowledgeable team is here to assist you in determining if workers’ comp is a benefit you need and, if so, to help make it affordable.

How Austin takes care of you and your employees is different from all the rest

Workers’ compensation insurance should not be the type of coverage that you just get-and-forget until something unfortunate happens to you or an employee.

Rather, there should be an ongoing process at your company dedicated to finding ways to reduce injuries and, subsequently, to lower your premiums. That due diligence will be a whole lot easier if you have a very hands-on insurance partner to collaborate with.

At Austin Insurance, our team is constantly thinking proactively about our clients’ workers’ comp coverage on all fronts, including compliance, risk management, workplace safety, managing premiums, and more.

As your insurance partner, we will:

  • Make sure you fully understand all of your workers’ comp options
  • Evaluate your coverage to ensure that it is properly based on your location, number of employees, payroll figures, and employee job classifications
  • Regularly assess whether you’re meeting the requirements of the state where you do business, not just as you are structured today, but also if and when your company grows
  • Analyze claims patterns to identify ways to reduce the likelihood of claims
  • Assist with implementing better safety guidelines
  • Review your return-to-work program and make sure it is designed to get injured employees back to the workplace as soon as medically able
  • And much more…

In addition, we act as the liaison between you and the carrier making sure that your claims stay high on their radar, that you are receiving timely communication about the claim, and, most important, that your claim is being resolved quickly and fairly.

We want you to know that as our client you will be able to lean on the experienced Austin team to handle any questions, issues, or concerns you have about your workers’ comp insurance.

To experience our highly professional and personalized approach to workers’ compensation insurance, please call the Austin team today, 781-447-5561.