Understanding Workers’ Compensation Limits and Their Impact on Employers
Workers’ compensation insurance is essential for the health, safety, and security of both employees and employers when a workplace accident or injury occurs. Employers purchase workers’ compensation insurance annually to provide coverage for employees who sustain injuries or illnesses at work. This coverage typically includes compensation for lost wages and medical expenses such as doctor visits, medications, and more.
For employers, understanding the limits and structure of their workers’ compensation policy is crucial, not only for compliance but also for financial and operational planning.
What Are Employer’s Liability or Part B limits?
Workers’ compensation limits refer to the maximum amount an insurance policy will pay if an employee decides to sue you for a work-related illness or injury. These limits are typically broken down into different categories, such as:
- Per accident: The maximum payout for a single incident.
- Per employee: The maximum payout for claims made by one employee.
- Policy aggregate: The total amount the policy will cover across all claims during a policy period.
Different policies offer different limits, and choosing the right coverage depends on the size of your workforce, the nature of your business operations, and your risk exposure. Typical policy limits are $100,000 per accident, $500,000 per policy, and $100,000 per employee.
How Claims Impact Employers
When an employee files a workers’ compensation claim, the employer may face several consequences. If a company has a history of frequent, severe, or high-cost claims, it may receive higher insurance premium costs. A higher number of claims can disrupt operations by affecting productivity and staffing. If an employee is absent from work due to an accident, it can reduce overall production, efficiency, and morale within the workplace. Additionally, the absence of an employee can lead to increased labor costs due to overtime pay for other employees covering for the missing worker.
Managing these claims requires significant time and administrative effort. Completing paperwork, managing expenses, conducting investigations, and implementing safety measures can shift focus away from core business operations. Understanding policy limits is crucial for reducing these risks and facilitating smoother claim handling.
GMS Workers’ Compensation Coverage
Choosing the right workers’ compensation policy and understanding its limits is a key part of responsible business management. Group Management Services (GMS) provides workers’ compensation, assistance, and coverage with a policy limit of $1 million. This coverage helps protect businesses from the financial strain of workplace injuries while ensuring employees receive the care and support they need.
Our team can assist with post-accident and claims investigation, return-to-work programs, claims certification, and more. We act as a helping hand as you navigate workers’ compensation and accompanying claims, giving you the expertise and knowledge you need to manage costs, protect your employees, and implement proper safety measures.
With GMS’ $1 million coverage, employers can feel confident they have strong protection in place. Still, it’s important to regularly review your policy and claims history to ensure your coverage continues to meet your needs. Feel free to contact us and learn more!