Workers’ Compensation

Take care of your workers

Slip and falls. Strains and sprains. Cuts and punctures. Falling objects, heavy machinery, elevations and ladders. Accidents happen, even if all safety measures have been taken at the work site. Having adequate coverage helps mitigate the resulting issues, whether they are medical or legal. Whether you own a construction company, a restaurant or a real estate agency, take care of your workers by maintaining proper Workers’ Compensation coverage.

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Protect Your Workers

Required by law for most businesses in Colorado, Workers’ Compensation provides coverage for your employees’ medical costs and physical rehabilitation resulting from injury or work-related illnesses during the course of employment, regardless of fault for the injuries or illness. It also helps to replace lost wages during treatment and rehabilitation, and provides compensation for permanent injuries as well as death benefits for surviving spouses or dependents.  Finally, in most cases, Workers’ Compensation protects you against being sued by your injured worker.

Coverage Details

Most Workers Compensation policies are divided into two parts:

Workers’ Compensation (Part A)

Coverage for your injured employees. There is no set limit to workers’ compensation coverage. The amount that will be paid out is determined by the state Workers’ Compensation Board at the time of the claim, based on factors like the injured employee’s weekly salary or the type and severity of their injury.

Employers’ Liability (Part B)

Coverage that protects you when an injured employee feels that you were negligent and responsible for their injury and decides to sue you instead of accepting workers’ compensation provided by the policy. Employers’ Liability coverage has set limits on the amount that will be paid out per occurrence for bodily injury, per employee for bodily injury by disease and an overall policy limit for bodily injury by disease.

rating factors

The price of your Workers’ Compensation policy is determined by 3 main factors:

Classification or Class Code: Is used to classify the type of work your employee is performing. Based on statistical data of prior claims, National Council on Compensation Insurance (NCCI), an independent advisory organization, calculates a rate assigned to each specific class code. This rate can vary greatly between different occupations. For example a clerical office employee’s rate can be as little as 0.05 when a roofer’s can exceed 20.00.

Annual Payroll: Total amount you pay to every employee classified in a particular class code. In Colorado this amount should not include any payroll paid to any business officers with at least 10% ownership stake in the company. Any officer with at least 10% ownership interest can reject or exclude themselves from Workers’ Compensation coverage. However, if an officer decides to elect Workers’ Compensation coverage, the amount of payroll that should be added on their behalf to the total payroll is mandated by the Colorado Department of Labor and Employment, and can vary from year to year. In 2019, Colorado mandated payroll considered for Workers’ Compensation rating purposes is $56,500 for each officer with at least 10% ownership stake.

Experience Modification Rate (EMR): It is a rating factor calculated annually by NCCI for each individual qualifying employer. It is based on comparing your historical claim and payroll data to other employers with similar business operations. This rate helps Workers’ Compensation providers understand your prior claims experience and predict future likelihood of claims. EMR is designed to encourage employees to implement safety standards and risk controls to lower the premiums. At the same time it punishes those without controls over claims by charging higher premiums.

Specialized Coverage for Your Business

Every industry poses unique risks and challenges, making it impossible to lump all types of businesses together under a standard policy. Rates and coverage requirements vary depending on industry, just like the types of coverage options and things to consider when purchasing an insurance policy.

At Kuzbiel Insurance Brokers, we help you sort through the insurance options that you should consider if your company employs one or more workers. We offer a variety of insurance products that are specifically tailored to workforce related risks unique to your industry and we are always happy to discuss available policy coverages and endorsements. Get a quote today.

For more information about recommended coverage for your business, visit our industry-specific pages: