Getting Worker’s Compensation Insurance in Delaware
While most business are legally required to buy worker’s compensation insurance, some business owner’s feel like it is an unnecessary expense. The reality, though, is that the small expense now could save the business from a large payout in the future. If an employee is injured at work, the worker could sue you for medical expenses incurred or seek to recoup lost compensation. The insurance protects your business by covering medical bills and wages of the employee.
According to the state website at www.dia.delewareworks.com, “Workers’ Compensation is a system, created by the Delaware Legislature, which provides benefits to workers who are injured or who contract an occupational disease while working.” When the employee petitions the Office of Worker’s Compensation, he or she could receive medical care, disability payments and compensation.
Who Is Required to Buy Workers Comp Insurance?
Most businesses will be required to have worker’s compensation insurance, there are few who do not have to have it. To know if you need to carry it, answer the following questions:
If you answered yes to one of these questions, you are required to carry worker’s compensation insurance or proof of it. A business can also self-insure.
How to Buy Worker’s Compensation Insurance in Delaware
To purchase insurance, you need to purchase from a carrier or agency that is licensed to underwrite a policy in the state. You can also contact the state’s assigned risk poll to find coverage. There are several insurance companies that sell policies to employers, and some companies will get quotes from several companies.
You can purchase insurance from well-known companies such as The Hartford, Travelers and Berkshire Hathaway GUARD. In addition, you can find pay as you go coverage form companies such as Employers. This type of payment plan allows the business to pay premiums monthly rather than pay in one large sum.
A business can also lower premiums by participating in the Delaware Workplace Safety Program. The state website explains, “The Delaware Department of Insurance offers Delaware employers an opportunity to lower workers’ compensation insurance premiums by participating in the Delaware Workplace Safety Program, for more information visit this site: http://delawareinsurance.gov/services/workplacesafetydiscount.shtml”
When asking for quotes, have the following information ready:
What are the Rates for Worker’s Compensation Insurance?
Rates for the state are up to 25% higher than other states, but by comparing quotes, you can find an affordable rate on your insurance coverage. The premium will be based on the type of business, nature of the work and past claims.
The Office of the Insurance Commissioner and the Office of Workers’ Compensation sets the rates for insurance costs in the state. To find the rate, you will need to know the class code and the base rate for that code.
For example, if the base rate is $5 and the annual payroll is $200,000 the premium would be calculated as such: $5 per every $100 of pay or 5%. In this scenario, the premium would be $10,000.
This simple scenario would get more complicated as a business will have employees that fall under different codes. If your policy is experience rated (mod), the premiums use the following formula: Base Rate X Payroll X Mod = Premium.
What Is the Cost of Not Getting Worker’s Comp Insurance?
Since it is legally required to carry Worker’s Compensation Insurance, not having it is a punishable crime. If you do not carry, the business can be fined. The penalty accumulates for each day that the business is not covered. The law states, “An assessment of $10 per day for each employee in the employer’s service at the time when the insurance became due, but not less than $250 for each day of such refusal or neglect and until the same ceases.”
Factors that Impact Your Coverage
One of the most important aspects to consider is that Worker’s Compensation Insurance will not protect you from the actual injury that occurred. Be sure that your liability insurance will cover employees as well as customers or clients. Certain people who are covered by your worker’s comp insurance can exempt themselves:
Unlike other insurance benefits awarded to an employee, an employer can’t require the employee to pay for worker’s compensation insurance in whole or in part. Per the state, “Employers may not charge an employee any portion of the premium or expense of carrying workers’ compensation insurance.” Furthermore, the employer or insurance carrier is also required to pay for the medical treatments and wages.
In addition, the employer is required to report accidents and injuries: “Employers shall keep a record of all injuries received by employees and file a report (First Report of Occupational Injury or Disease) within 10 days in writing to the Office of Workers’ Compensation and their insurance carrier.”
An employer should also consider the location of the worker as the insurance only covers the location where the work occurs. For instance, if the worker is in an office in another state, you will need to purchase insurance in the state where the work is taking place.
Importance Worker’s Compensation Insurance in Delaware
Not only is workers comp insurance required, but the policy could also save your business money if an employee is injured while on the job. The coverage will pay for medical treatment and lost wages of the employee. When shopping for worker’s comp insurance, it is best to get several quotes to find the best rates. Speak to a licensed agent to help you make the right choice.
For more information on Worker’s Comp Insurance, please visit the following resources:
Assigned Risk Pool Application: