Required by law, Workman's Compensation Insurance, usually, called worker's comp protects your employees from injury, illness, and even death that is work related.
Shop Around
Using statistics from The National Council on Compensation Insurance (NCCI) insurers determine high and low risk industries. Within the industry, individual employer safety records help when determining a specific insured's premium. Like everything else, you buy, shopping around pays off as rates do vary from company to company.
Your construction company's experience part of the premium calculation comes from the three-year rolling average of claims made during the prior four years. The four years comes about, as there is a lag period of one-year.
Employees on a Job Site May Have Other Recourse
Imagine you are a plumbing a subcontractor on a construction job. As the project is multi-stories the general contractor had scaffolding erected. One of your employees was on the second floor running some pipe, and the scaffolding gave way. Your employee fell two stories and severely injured his back. Because of his injury, he suffered three months of no work (lost wages) and required extensive physical and occupational therapy (medical costs). Extended physical labor is out of the question as it causes a great deal of pain (disability claim). It looks like you will take a hit on your workers comp experience rating, as this is a large claim.
But wait, you may want to join with your employee or your insurance company in a lawsuit against the scaffolding company as an investigation proved the scaffold was improperly put up. The scaffolding company had other similar lawsuits against it yet the general contractor hired them. Your employee and your workers comp insurance company can sue the general contractor for negligence in hiring a company with a bad safety record. If the insurance company receives an award because of the lawsuit, the hit on your experience rating is not as bad. The impact on your future premiums is less than if your insurance company paid all expenses related to your employee's claim.
Take-Aways
* Comparison shop for the best rates for your construction company's worker's comp insurance.
* Depending on the circumstances of the injury, others parties could be responsible under product liability or third-party liability claims. Work with your insurance company to keep their payout as small as possible to keep your premium low.
* Employers with good safety records pay less than employers who have poor safety records.