Saturday, July 17, 2010

Steps to Buying Workman's Comp Insurance

Worker's compensation coverage is something that most states require employers to obtain once they hire employees. This benefit covers medical costs and lost wages incurred by individuals injured on the job. An employer should follow these steps to buying workman's comp insurance in order to remain in compliance with the law.

The employer should check with the state to determine whether the company is required to get coverage. Organizations that have employees in more than one state or workers who frequently travel out of state must investigate the laws for each of those states. The employer should not try to cut corners when it comes to this situation because it can end up costing the company millions of dollars in negligent claims.

Once a company has determined that it needs coverage, it should obtain it either from the state, if mandated, or through a private carrier. If a private carrier is used, the employer may deal directly with the carrier or go through a broker. Using a broker is recommended if representatives from the company do not wish to do their own comparison shopping.

A broker or carrier can be found by doing an online or phone book search or asking companies in the local area for their recommendations. Some states provide an online comparison list of all carriers that sell within the state, so check the state division of worker's compensation Web site for more information. Once the relevant carrier is found, a representative from the company will be asked to complete an application for coverage and submit it with the premium payment.

Following these steps to buying workman's comp insurance will provide the employer with the coverage it needs to protect both itself and employees. The employees will receive payment for medical treatment and wages due to work-related injuries. At the same time, the employer will remain in compliance with the law and avoid potential legal liability.
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