The Problems With Standard Workers Compensation Insurance

Workers Compensation Insurance is the money which you must pay every year to cover any injuries that your employees may incur on the job. The truth is, when you own a workers comp policy, you own the problems that go with it!

You also must pay a large chunk of money up front, just for the privilege of owning that workers comp policy. If you've been "good" throughout the year (with little to no injuries) you might get some of that money back at the end of the year. But all of that cash is tied up until then!

When you enter into a relationship with a PEO (Professional Employer Organization), you pay that PEO a small, recurring fee. For that fee, the PEO assumes the responsibility and the administration of all claims, and you don't have to put out any money up front. That frees up your cash for what you really need to spend it on; your business!

Some Statistics

If you are supposed to carry Workers Comp Insurance but are caught without it, you will face a fine or jail (or both).

Most of the time, that "independent contractor" you've hired is not truly an independent contractor at all, and must be covered under your Workers Comp Policy.

Coverage is only elective in two states: New Jersey and Texas. Therefore, most states require employers to accept its provisions and provide the benefits specified therein.

According to a 2005 report from the National Council on Compensation Insurance, the medical care portion of lost-time claims — claims serious enough to require time off work — increased by an estimated 10.5 percent in 2004.

A study by Liberty Mutual Insurance Cos. found that the average prescription costs workers compensation insurers roughly 75 percent more than the same medication costs a group health plan.

Workers compensation medical care costs have increased much faster than the medical consumer price index in part because of the increased use of newer, more expensive prescription drugs to treat injured workers and a significant increase in the cost and utilization of hospital services, particularly for critical care and in the use of MRIs.

Now You Know

It's time to contact us for your Workers Comp solution today!