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Workers’ Compensation Insurance.

Workers’ Compensation Insurance for small business owners with Kevin Ring.

Workers' Compensation Insurance for small business owners with Kevin Ring.

Understanding and managing Workers’ Compensation Insurance is crucial for small business owners, balancing both employee safety and benefits, and the financial impact on a small business.

To help us better understand Workers’ Compensation Insurance, Henry Lopez has a conversation with Kevin Ring, the Lead Workers’ Compensation Analyst at the Institute of WorkComp Professionals.

Kevin shares his expert tips and in-depth knowledge on managing Workers’ Comp effectively.

Kevin is the Lead Workers’ Compensation Analyst at the Institute of WorkComp Professionals (IWCP), which trains both insurance agents and employers in how to build a successful workers’ comp program.

Employers have been taught that because workers’ comp is mandatory, and the policy is the same no matter who they work with, that they have no control and should just shop for the lowest price. But nothing could be further from the truth!

Kevin is extremely knowledgeable in the field of workers’ compensation, and he wants to help business owners and employers across America (particularly those in blue/grey-collar industries) limit unnecessary expenses and have more productive and profitable businesses.

He has reviewed and analyzed over 1,200 experience mod worksheets with clients and has served as an expert witness in litigation involving the workers’ comp premium audit.

Kevin lives in Asheville, North Carolina.

Workers’ Compensation Insurance:

  • What is Workers’ Compensation Insurance and who needs it? (Purpose and legalities of it from an
    employer’s perspective.)
  • How are premiums calculated, and what factors can affect them?
  • If I am planning for my start-up, how to do estimate this expense?
  • Please share some tips on how to properly classify (Business Classification Code) a business. (These codes are not the same as NAICS codes.)
  • How should small businesses deal with injured employees? What’s the recommended process?
  • What is a Workers’ Comp Premium Audit and how to ensure they are done right (on average, 75% are incorrect)?
  • How can businesses control what they pay in premiums without impacting their coverage?
  • What are some ways employers can have a more successful workers’ comp program, better employee relationships, and a more profitable business?
  • How do I learn the legal requirements for Workers’ Compensation in my state? (Workers’ compensation laws vary by state. Texas is the only state where it’s not required.)
  • Who do I consult with to get Workers’ Comp Insurance? Same broker I have my Business Liability policy with? (Discounts for bundling?)

Episode Host: Henry Lopez is a serial entrepreneur, small business coach, and the host of this episode of The How of Business podcast show – dedicated to helping you start, run and grow your small business.


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This episode of The How of Business podcast is sponsored by Relay.

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Special offer for The How of Business listeners, sign up for Relay using this link and you’ll also get $50 added to your account once you fund your new account.

This episode of The How of Business podcast is sponsored Relay. Relay is an online banking and money management platform for small business.

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More about Workers’ Compensation Insurance:

Workers’ Compensation Insurance is a critical component of the small business insurance portfolio, providing vital protection for both employees and employers. This form of insurance is designed to assist workers who get injured or ill as a result of their job. For small business owners, understanding and effectively managing workers’ compensation can be pivotal in maintaining a stable, productive, and legally compliant workplace.

Understanding Workers’ Compensation Insurance

Workers’ compensation insurance is a state-mandated (except in Texas) program that consists of payments required by law to be made to an employee who is injured or disabled in connection with work. The federal government does offer its own workers’ compensation insurance for federal employees, but every individual state has its own workers’ compensation insurance program. Be sure to check your state’s requirements and regulations.

This insurance provides employees with compensation for lost wages and medical benefits, and in exchange, employees typically forfeit the right to sue their employer for the tort of negligence. This trade-off is known as “the compensation bargain.”

When an Employee is Injured on the Job

When an employee is injured on the job, there are several key points a small business owner must consider:

1. Immediate Response: The first priority is to ensure the employee receives the necessary medical attention. Depending on the severity of the injury, this could range from administering first aid to calling emergency services. If it’s a serious injury, or in doubt, call 911. Remember that sometimes seemly minor incidents, like a head injury, can escalate to life-threatening situations.

2. Documentation: It is crucial to document the incident thoroughly. This includes writing an accident report, recording witness statements, and taking photographs of the scene if applicable. Documentation will be essential for the workers’ compensation claim process.

3. Reporting the Incident: Employers must report the injury to their workers’ compensation insurance carrier as soon as possible. Delay in reporting can lead to penalties and can complicate the claims process. As Kevin Ring explains in this episode of The How of Business podcast, even if you are not filing a financial claim you should still report the incident.

4. Claim Management: Once a claim is filed, the employer should stay actively involved in the process, working with the insurance carrier to manage the claim and facilitate the employee’s return to work.

5. Communication: Maintain open lines of communication with the injured employee. Discuss their recovery and any job-related concerns they may have. This can help in planning for their return to work, possibly in a modified or light-duty capacity if necessary.

6. Prevention: After an incident, it’s important to review safety protocols to prevent future injuries. This may involve additional employee training, updating equipment, or revising work procedures.

Workers’ Comp Considerations for Small Business Owners

Small business owners should carefully consider the following when dealing with workers’ compensation insurance:

  • Cost: Workers’ compensation insurance premiums are based on the type of work employees are doing and the company’s claims history. Implementing safety programs can help reduce the likelihood of injuries and, consequently, the cost of insurance.
  • Legal Requirements: Most states require any business with employees to carry workers’ compensation insurance. Failing to carry workers’ compensation insurance or otherwise meet state regulations can result in fines, criminal charges, and civil liability.
  • Provider Selection: Choose a reputable insurance provider with experience in workers’ compensation. They can be a resource for safety training and risk management strategies.
  • Employee Classification: Ensure that employees are classified correctly according to their job duties. Misclassification can lead to incorrect premium calculations and potential penalties.

Workers’ compensation insurance is not just a legal requirement but a fundamental aspect of risk management for small businesses. By understanding and effectively handling workers’ compensation claims, small business owners can protect their employees, minimize financial risk, and foster a safer, more productive work environment.

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