- Workers' compensation insurance
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.
Workers’ comp protects employees at your manufacturing business
Whether they work in production, shipping and receiving, transportation, or office administration, your manufacturing employees face daily risks. If there’s an accident and an employee is hurt, it can lead to costly setbacks or even a lawsuit.
Workers' compensation insurance can cover medical bills and other related expenses when an employee is injured at your business.
Workers’ compensation can help pay for an injured employee’s:
- Immediate medical costs, such as an emergency room visit
- Ongoing medical costs, such as pain medication
- Partial lost wages while the employee is unable to work
Workers’ comp protects manufacturing business owners
Usually included in a workers’ comp policy, employer’s liability insurance provides protection when a production worker, office clerk, or other manufacturing employee decides to sue a business owner over an injury.
Employer’s liability insurance can help cover:
- Attorney’s fees
- Court costs
Without insurance, you could find yourself paying for a costly legal defense, even if you weren’t at fault. However, employer’s liability insurance does have limits to how much it will pay for a lawsuit.
How much does workers' comp cost for manufacturing businesses?
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
State laws set workers’ comp requirements for manufacturing businesses
Each state creates its own laws for workers’ compensation requirements. For example, food and beverage manufacturing businesses in New Hampshire must carry workers’ compensation insurance for their employees. However, Mississippi manufacturers 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.
Find workers' comp requirements in your state
Monopolistic state funds
In certain states, manufacturing businesses 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.
Lower workers’ comp costs with risk management
From hazardous production line machinery to repetitive motion injuries, manufacturing employees face many risks. Whether you’re the owner of an apparel company or a food and beverage manufacturing business, you can create a safer work environment with:
- Employee safety training
- Proper equipment, such as gloves and goggles
- Equipment maintenance
- Regular employee breaks to prevent repetitive motion injuries
By maintaining a safe work environment, you can decrease workplace accidents. That means fewer claims – and a lower insurance premium.
Other important policies for manufacturers
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 injuries. Other recommended manufacturers’ insurance policies include:
General liability insurance: This policy can pay legal expenses related to customer property damage and injuries, along with copyright infringement lawsuits.
Business owner’s policy: This policy bundles general liability insurance with commercial property insurance, usually at a lower rate than if the policies were purchased separately.
Umbrella insurance: Also called excess liability insurance, this policy boosts coverage on a general liability, employer’s liability, or commercial auto policy once the limit is reached.
Get free quotes and compare policies with Insureon
Are you ready to safeguard your manufacturing business with workers’ compensation or another type of insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.