Workers’ compensation insurance for professional services businesses

From law firms to tutoring agencies, no professional services business with employees is immune to injury. A lawyer could slip on an icy walkway and suffer a concussion, or a tutor could trip at a student’s home and break a wrist.

When an employee is injured on the job, workers’ comp helps pay for medical expenses, partial wage replacement, and more.

• Immediate medical costs, such as an ambulance ride
• Ongoing medical costs, such as physical therapy
• Partial lost wages due to time away from work

Typically included in a workers’ comp policy, employer’s liability insurance provides protection when a career coach, translator, travel agent, or other professional decides to sue a business owner over an injury.

Employer’s liability insurance can help cover:

• Attorney's fees
• Court costs
• Witness fees
• Settlements

Even if a lawsuit is found to be frivolous, without proper coverage, you could find yourself paying for an expensive legal battle.

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

Workers’ compensation requirements differ from state to state. For example, law firms in New York must carry workers’ compensation insurance for every employee, including those who work part time. However, Alabama law firms are only required to carry workers’ compensation when they have five or more employees.

Sole proprietors, independent contractors, and partners don’t have to carry workers’ compensation insurance, but many still choose to purchase this policy for the protection it offers. It's always a good idea to carry workers' comp because health insurance can deny claims for injuries that are related to your job.

In some states, professional services businesses must purchase workers’ compensation insurance through a monopolistic state fund. Those states are:

• North Dakota
• Ohio
• Washington
• Wyoming

If you purchase workers’ comp through a monopolistic state fund, your policy probably won't include employer’s liability insurance. You can buy stop gap coverage from a private insurer to gain this protection.

At any office, a worker could trip on a power cable or slip on a recently mopped floor. You can create a safer workplace with:

• Employee safety training
• Prompt cleanup of spills
• Elimination of hazards, such as clutter and uneven flooring

By managing your risks, you can decrease workplace injuries. That means fewer claims – and a lower insurance premium.

Workers’ compensation protects your employees and to some extent your business, but it doesn’t cover all risks. Other recommended policies for professional service providers include:

Business owner's policy (BOP): This policy bundles general liability insurance with commercial property insurance at a lower premium than if the policies were purchased separately.

Professional liability insurance: Also known as errors and omissions insurance (E&O), this policy helps cover legal expenses if a professional services business is sued for unsatisfactory work.

Cyber liability insurance: This policy helps businesses survive data breaches and cyberattacks by paying customer notification costs and other related expenses.

General liability insurance: This policy can cover expenses related to third-party bodily injuries, property damage, and advertising injuries. It's often required for commercial leases and client contracts.

Are you ready to safeguard your business with workers’ compensation or another type of professional services insurance? Complete Insureon’s easy online application today. Once you find the right policy, you can begin coverage in less than 24 hours.