Workers’ compensation, sometimes known as workmans comp, insurance is a coverage that serves two purposes.
First, the coverage protects workers on the job. If an employee is injured while working for an employer, workers’ compensation coverage kicks in and provides compensation for a certain portion of the income they will lose due to being unable to work when injured. The coverage is applicable no matter who was at fault for the accident, the employer or the employee.
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The Best Workers Comp Insurance:
- Best Programs: Progressive
- Best Savings: biBERK
- Best for Experience: Travelers
- Best Medical Provider Network: Hartford
- Best for Multinational Businesses: Zurich
Workers’ compensation coverage also covers employers against lawsuits from workers who were injured while working for said employer. If an employee dies while working on the job, the coverage will also provide death benefits for any dependents.
It must be noted that workers’ compensation laws vary by state. Most states require all employers of a certain size to carry coverage. A few states don’t mandate coverage. For example, Texas does not require workers’ compensation coverage but requires employers to cover all medical expenses and costs related to an injury on the job.
Employers and employees alike should confirm the laws and legalities of workers’ compensation insurance in their state.
Breaking Down Workers’ Compensation Insurance
To further understand workers’ compensation and how the coverage works, it should also be noted that while these policies can become complex and detailed, the gist of the coverage is simple.
An employer is generally required by state law to hold some form of workers’ compensation insurance once they employ over a certain number of employees. The coverage applies to any injury incurred during the scope of employment.
For example, if an employee driving a car for work purposes gets into an accident that causes an injury, the workers’ compensation coverage would kick in. While it doesn’t matter if the car is personally owned or a company automobile, the coverage does not apply to and from work.
Generally, all injuries incurred while working are covered, even in rare instances such as natural disasters, terrorist attacks, and workplace violence.
Workers’ compensation also covers death and disability. If an employee dies from injuries on the job or is permanently disabled, the coverage provides benefits to the disabled individual or his grieving dependents.
Finally, an employee can waive his or her coverage and sue the employer if he or she believes this or her injuries stemmed from neglect. In such instances, the policies offer protection against lawsuits, legal costs, and more. This is an important factor for many businesses, as legal costs can add up to many lawsuits.
What is Not Covered?
Overall, there is no one-size-fits-all workers’ compensation policy once you start looking across state lines. However, there are a few situations in which most workers’ comp policies will never cover:
- Workplace safety costs: If employees keep getting hurt on the job, an employer will need to make changes to the workplace and take safety measures into account. If not, said employer could be fined by OSHA. These safety improvements and measures will not be covered by any workers’ comp coverage.
- Replacement employees: When an employee is injured and not working, an employer may need to fill the position to ensure work gets completed on time. While workers’ comp insurance pays an injured employee’s wage during this time, a company will be responsible for the replacement employee costs.
- Third-party problems: If a third party sustains an injury while at a place of business or job site, workers’ compensation will not cover the costs for the third party, like a customer. Workers’ comp is only for employees. A business is required to hold general liability insurance for injuries potentially sustained by third parties.
- OSHA penalties: An employer is responsible for maintaining a standard level of workplace safety and OSHA makes sure the company follows through on that standard. If not, an employer could be fined by the organization. Workers’ compensation insurance does not cover OSHA fines for a company.
With regard to the cheapest workers’ comp rates, North Dakota has the cheapest. When rates were measured using a comparable basis, North Dakota had the lowest workers’ comp rates in the U.S. Where the average workers’ comp cost index cost was $1.85 in other U.S. states, North Dakota employers only paid $0.88 per $100 of payroll.
Most Expensive Rates
On the other side of the coin, California is the U.S. state with the highest workers’ comp rates. Employers pay $3.48 per $100 of payroll in workers’ compensation. This is significantly more than North Dakota at $0.88 and well above the national average of $1.85.
The 6 Best Workers Compensation Insurance Companies
For employers looking for coverage, Benzinga recommends a list of the top three workers’ comp insurance providers.
1. Best Programs: Progressive
Progressive offers one-stop shopping for workers’ compensation insurance through their Progressive Advantage Business Program. This program offers small businesses an array of insurance solutions underwritten by specially chosen carriers.
Getting a quote is easy online through our partner or live on the phone with a trained expert. The specially trained experts help ensure tailored insurance coverage to match your needs.
2. Best for Savings: biBEK
Berkshire Hathaway’s biBERK provides small business owners a straight-forward, cost-effective workers’ compensation insurance. biBERK takes the middleman out of the fray so you get insurance straight from the source. According to its website, you’ll likely save up to 20% on costs. Plus, you’ll save time from the get-go with its easy online quote tool and claims process.
Finally, as the inimitable Warren Buffett leads Berkshire Hathaway, you can rest easy knowing that biBERK inherits the experience, stability and dependability from its parent.
3. Best for Experience: Travelers
Travelers is the largest provider of workers’ comp coverage in the U.S. with 7.81% of the market share. They have solid reviews and have written billions in direct premiums. No matter what industry you are in you can customize your coverage and needs to your specific business.
Their claims service is highly rated and their competitive prices make them a top contender in the workers’ compensation insurance space.
4. Best Medical Provider Network: The Hartford
With 5.81% of the market, Hartford Group is the second biggest provider in the U.S. When you get coverage with The Hartford you get a preferred medical provider network, prescription drug features, nurse case managers and pay-as-you-go billing solutions. With The Hartford, employers can select to pay their premiums annually or as they go, which many employers find beneficial and like to have the option.
The Hartford goes above and beyond by offering benefits that cannot be found with every insurer. Get a custom quote today for the best premium on the market.
5. Best for Multinational Businesses: Zurich
Zurich Insurance holds over 5% of the workers’ comp market and writes billions in premiums each year. Zurich is praised for their fast, responsive claims service and its ability to service all employees, no matter their location. Employers will find working with Zurich makes this cumbersome insurance process smooth and stress-free.
Click the custom quote option to get instant rates and start insuring your employees with the best and most knowledgable carriers.
The best policy for an employer will depend on the state, rates, and other factors. There is not a one-size-fits-all policy when looking at workers’ comp coverage. A company would be best off looking through a plethora of coverage providers in their state to find the ideal option for its needs.