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Workers Compensation Insurance
 

Workers compensation insurance (WC) is a state-mandated form of insurance that provides compensation medical care, part or lost wages and permanent disability for employees who are injured in the course of employment, in exchange for mandatory relinquishment of the employee’s right to sue his or her employer for negligence.

Employers have a legal responsibility to their employees to make the workplace safe. However, accidents happen even when every reasonable safety measure has been taken.


 
 

Do I need Workers Compensation Insurance?

To protect employers from lawsuits resulting from workplace accidents and to provide medical care and compensation for lost income to employees hurt in workplace accidents, in almost every state, businesses are required, by law, to purchase workers compensation insurance. Workers compensation insurance covers workers injured on the job, whether they're hurt on the workplace premises or elsewhere, or in auto accidents while on business. It also covers work-related illnesses.

Workers compensation provides payments to injured workers, without regard to who was at fault in the accident, for time lost from work and for medical and rehabilitation services. It also provides death benefits to surviving spouses and dependents.

Each state has different laws governing the amount and duration of lost income benefits, the provision of medical and rehabilitation services and how the system is administered. For example, in most states there are regulations that cover whether the worker or employer can choose the doctor who treats the injuries and how disputes about benefits are resolved.

Workers compensation insurance must be bought as a separate policy. Although in-home business and businessowners policies (BOPs) are sold as package policies, they don't include coverage for workers' injuries.

It is mandatory in the state of Illinois to obtain workers compensation benefits if you employ at least one (1) employee other than yourself.

What could happen if I do not have a Workers Comp policy?

If your company does not have Workers Compensation insurance, your employee can choose to file a civil suit. If the employee files a civil lawsuit, proof of the injury is evidence of negligence on the employer’s part.

To compel compliance with the workers compensation fund, most states can and will issue fines between $10,000 and $100,000 along with any civil lawsuits imposed by the injured employee, however some states allow for the possibility of criminal penalties as well. Under Illinois Law Section 4(d), an employer that knowingly and willfully fails to obtain insurance may be fined up to $500 for every day of noncompliance, with a minimum fine of $10,000.

Corporate officers can be held personally liable if the company fails to pay the penalty. Since 2006, the Illinois Industrial Commission has collected over $13 Million in fines, while providing workers the proper legal protection and other employers a more fair competitive arena. In addition, corporate officers who are found to have negligently failed to obtain insurance are guilty of a Class A misdemeanor; if they are found to have knowingly failed to obtain insurance, they are guilty of a Class 4 felony.

An employer that knowingly fails to obtain insurance loses its protections under the Workers’ Compensation Act. An employee who is injured during the time the employer was uninsured may sue the employer in civil court, where benefits are unlimited. In addition, during the trial the burden will be upon the employer to prove it was not negligent.

On top of the fines, fees and possible criminal charges, the Commission can issue work-stop orders on any employer that has been found to have knowingly failed to provide insurance.

In many cases, these scenarios have completely bankrupt companies.
 

How to shop for Workers Compensation

Step 1. — Learn your state’s workers' compensation insurance regulations. Each state has different requirements and restrictions. There are a few states, called monopolistic states that require all employers to purchase insurance from the state itself.  Only North Dakota, Ohio, Washington, West Virginia, and Wyoming are states that require employers to purchase their workers compensation policies via state programs.

Step 2. — Obtain a quote through Hebert Insurance Agency by calling 1-888-215-7190 and speaking to someone in the Customer Service or New Business department. Our Representatives will provide you with at least 3 quotes from our carriers to offer you the most affordable coverage for your industry.

Step 3. — Evaluate the various workers' compensation insurance carriers. Consider the following factors in making your decision: costs, claims process, adjuster experience and value added services such as risk management assistance. Remember, that no insurance agency can quote you higher or lower than any other agency, and it is unlawful to do so.


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