Choosing the Right Worker's Compensation Insurance for Construction Workers

Worker's compensation insurance taken by a construction employee gets benefits if they face any work-related injury or illness. A worker's comp is required by every state, and the employers are the ones who are responsible for buying and providing this insurance for their employees. 

In the United States, some form of workers' compensation is typically compulsory for almost all employers in most states (depending upon the features of the organization), with the notable exception of Texas as of 2018.

READ MORE ON: WHAT IS WORKER'S COMPENSATION INSURANCE & FEATURES

In this article, we discuss the various types of worker's compensation insurance that can be bought by the employer based on the category and requirements of the organization.

Types of Worker's Compensation Insurance Plans in Construction

Any worker's compensation insurance can cover medical expenses, lost wages, rehabilitation, and even funeral cost based on the type of worker's compensation insurance taken by the employer. 

The U.S. Department of Labor's Office of Workers' Compensation Programs (OWCP) administers four major disability compensation programs which provides to federal workers (or their dependents) and other specific groups who are injured at work or acquire an occupational disease – providing the injured:

1. Wage replacement benefits
2. Medical treatment
3. Vocational rehabilitation
4. Other benefits

How to Choose Worker's Compensation Insurance for Construction Workers?

Understand your state's requirements for worker's compensation. Workers’ compensation can be a tricky and complicated system to maneuver – especially because there are 51 unique systems set up in the United States. Workers’ comp is regulated by the states (including the District of Columbia), and no two states have the same regulations. So, check the regulations before going for worker's comp.

Choose a Private Insurer or State Fund based on how big the business is. The choice depends on the industry's classification code and payroll. More dangerous industries like construction and manufacturing require higher premiums than an accounting firm. The private sector insurer gives you the power of comparing prices and coverage. For small businesses, it is easy to get insurance from the state fund. Whatever be the choice, it is necessary to find a reputable provider.

Calculate worker's compensation costs for construction and contracting 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

A worker's comp is not only protection and care for employees but also a privilege and liability safety for the employers. All employees working in a construction company need not require a same policy. The site workers and the office-based workers require different policies. Hence, before choosing a policy, it is necessary to categorize the type of employees, their payroll and their work environment, before deciding a policy. 

Always know the benefits covered by the policy. In order to choose the right worker's compensation insurance, it is necessary to know all the benefits that are provided by worker's compensation insurance as per the state regulations. So, each policy will have a list of services they cover. Before choosing a worker's comp, always check the services that are necessary and also reduce the items that are not needed to save money. When working in severe site conditions, it is necessary to add more services if not included and fix the policy.

Buying a worker's comp does not mean that the safety plan, consideration, and rules in a construction site can be compromised. The employer must make the employee aware of the safety plans, and consideration by proper communication. 

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