Workers' compensation insurance, sometimes called workman’s compensation insurance, workers’ liability insurance or workers’ comp insurance, covers your employees’ medical expenses and at least some portion of their lost wages if they are injured on the job.

How does workers’ compensation insurance protect your business?

Most states require companies to purchase workers' compensation insurance for their employees. A few states have “pools” of insurance that is available for you to purchase, but in most states, companies must find private workers’ compensation policies.

Because workers’ comp insurance is mandated by law, small-business owners often think that it is just one more overhead expense that provides little benefit. But good workers' compensation insurance is actually an affordable benefit that protects both you and your employees.

Following are the optional parts of workers’ comp insurance policies that have an impact on the cost and value of the coverage for you and your employees:

• In the employers' liability section, or "part two" coverage, your legal expenses would be covered if an employee makes an inappropriate claim of work-related illnesses or injuries. While this section is almost always included in workman’s compensation insurance, you can choose the amount of liability coverage in this section.

• Coverage for employees who are injured in states outside those where your business normally operates.

• Coverage for various types of injuries and illnesses. The mandated part of this section depends on the state where your business is located, but you should be aware of what is and is not covered.

• Coverage for funeral expenses and financial support to dependents.

• Reimbursement percentages for lost wages.

Employer's Liability coverage, protects your company should an employee claim that his or her injury or illness was caused by your company's negligence or failure to provide a safe workplace.

Employer's Liability coverage may be described in your contract in this way: "Workers' Compensation and Employer's Liability Insurance shall be provided as required by law or regulation (statutory requirements). Employer's Liability insurance shall be provided in amounts not less than $500,000 per accident for bodily injury by accident; $500,000 policy limit by disease; and $500,000 per employee for bodily injury by disease."

The cost of workers’ comp insurance can vary widely depending on these options, so if you are comparing premium costs, you need to be aware of these variables.

Contact us today to obtain the proper applications for more information on the availability in your state.