Workers’ compensation insurance covers medical costs and lost wages for work-related injuries and illnesses. This policy is required in almost every state for businesses that have employees.
Even if you take steps to ensure a safe work environment, you can’t prevent every accident. From carpal tunnel syndrome to a needlestick injury that transmits hepatitis, an injury or illness can be financially disastrous for a small healthcare company. Workers’ comp can pay for medical bills and missed wages while an employee is recuperating.
Usually included in a workers’ comp policy, employer’s liability insurance provides protection when a home healthcare provider, nurse, or other staff member decides to sue a healthcare business over an injury.
Employer’s liability insurance can help pay for:
Without adequate coverage, you could find yourself paying for a costly legal defense, even if a lawsuit is frivolous.
The amount you pay for workers’ compensation is a specific rate based on every $100 of your business’s payroll. Your premium is determined by the type of work done by your employees (classification rate), your experience modification rate (claims history), and your payroll (per $100).
The formula is:
Classification rate x Experience modification rate x (Payroll / 100) = Premium
Every state creates its own laws for workers’ compensation requirements. For example, every healthcare business in Minnesota must carry workers’ compensation insurance for its employees – even part-time workers. However, Alabama healthcare companies are only required to carry workers’ compensation when they have five or more employees.
While self-employed or independent contractors, sole proprietors, and partners don’t have to carry workers’ compensation insurance, you can purchase a policy to protect yourself, too.
In certain states, healthcare professionals must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:
If you purchase workers’ comp through a monopolistic state fund, it might not include employer’s liability insurance. However, you can purchase it from a private insurer to fill this gap in coverage.
From personal care aides to dentists, healthcare professionals face tremendous risks: back injuries from moving and lifting patients, infections from contaminated needles, and repetitive motion injuries. Owners of medical practices can help reduce risks with:
By implementing a risk management plan and maintaining a safe work environment, you can limit workplace accidents. That means fewer claims – and a lower insurance premium.
Workers’ compensation insurance protects your employees and to some extent your business, but it doesn’t cover common risks such as property damage and customer injury. Other recommended insurance policies for healthcare professionals include:
General liability insurance: This policy can pay legal expenses related to patient property damage and injury, such as a patient who trips in your office.
Business owner’s policy: This policy bundles general liability insurance with commercial property insurance, often at a lower rate than if the policies were purchased separately.
Cyber liability insurance: This policy helps healthcare professionals survive data breaches and cyberattacks by paying for recovery expenses and other associated costs.
Professional liability insurance: Also called malpractice insurance for medical professionals, this policy can help cover legal expenses related to accusations of errors or negligence.