Determining The Limits Of Your Workers' Comp Insurance Coverage

30 March 2023
 Categories: Insurance, Blog


A workers' comp insurance policy is essential for any business, regardless of size. But what exactly does this coverage entail? And how do you determine the right coverage limits for your business?

Read on to get a better understanding of how to set the limits for your workers' comp insurance coverage.

Assess Your Business Model

When it comes to choosing your workers' compensation insurance limits, you should first consider the needs and demands of your business. This includes taking into account the type of work that your employees do and what risks they may face while doing it.

For example, if you run a construction business, your workers' comp policy should cover any accidents that happen at the worksite. You have to purchase a policy with a higher limit to make sure that the coverage is enough for potential claims.

On the other hand, if you own an office-based firm with fewer physical risks, you may require less coverage. This will enable you to save money on premiums since the risk of worker injury is lower.

Determine the Type of Policy

There are two types of workers' compensation insurance limits –– medical only and combined. The medical-only limit covers expenses related directly to medical treatment for employees who have been injured or become ill due to their job duties. This is usually the most affordable option since it does not cover other types of expenses, such as lost wages or death benefits.

The combined limit covers medical and other types of losses that may arise from a work-related injury or illness. This type of policy is generally more expensive but provides better coverage. It includes things like lost wages, legal fees, and other damages associated with workplace injuries or illnesses.

Familiarize Yourself With State Laws

Additionally, you will want to factor in any laws or regulations in your state that require certain limits for workers' comp coverage. Every state has its own set of laws and regulations governing workers' comp insurance, so you'll need to understand what the requirements are in your state before deciding on a coverage limit.

For example, some states may require employers to carry at least $100,000 in coverage, while others have no minimum requirement at all. They only require some form of workers' comp coverage to ensure that employees injured in the workplace have access to medical treatment and other benefits.

But in some cases, these minimums may not be enough if you want comprehensive protection against employee claims. It might help to consult an experienced insurance agent who can help assess the level of risk associated with your particular business environment and recommend an appropriate limit based on those factors.