Some workers comp policies also provide employer liability insurance, which covers you if you're sued by the family of an employee who is killed in the workplace. Thus, it pays to shop around. What you must cover Your state has its own workers comp requirements that you must comply with, including a menu of illnesses and injuries that qualify as a workers comp claim. It also mandates the level of benefits you must provide to your employees. Workers comp policies will typically provide basic coverage for accident and illness, as well as coverage for legal fees for lawsuits filed by employees for job-related injuries.
Some states also mandate a death benefit and financial support to dependents.
The process of compiling information from your agent, the insurance company, the NCCI, and your records is arduous. Your first year's premium will be estimated by your insurer, using your estimation of the company's payroll and the nature of your business. The insurance company will do an audit at the end of the first year to determine a more accurate premium based on a year of payroll information and your business classification. You can ask for a copy of the insurance auditor's calculations or work papers to see how payroll was calculated and look at any classification changes. After the first year, your premium is based on your workplace injury rate, among other factors, so you may see a change based on your company's experience with workers comp claims.