A Georgia Business Owner’s Guide to Workers’ Compensation Insurance

New business owners have many responsibilities, and purchasing the proper insurance policies is paramount for the future of the business. While other forms of business insurance are optional, most businesses legally have to carry workers’ compensation. Because state legislatures, not the federal government, sets rules and regulations for workers’ comp, it’s imperative to know your state-specific laws.

Workers’ Compensation Coverage and Benefits

Workers’ compensation is an insurance policy that covers medical expenses, lost wages, and rehabilitation costs if an employee suffers from a workplace injury or contracts an occupational illness.

If an injury occurs, it entitles the worker to weekly income benefits if they cannot work for over seven days. These benefits are two-thirds of the employee’s average weekly income but cannot exceed $675 a week. How long benefits last depend on the severity of the injury, but Georgia does offer lifetime benefits for catastrophic injuries.

Coverage Requirements Under Georgia Law

Under state workers’ compensation law, all businesses that have more than three employees must have workers’ compensation in Georgia, with the exception of railroad carriers, government agencies, farmworkers, and domestic workers.

In Georgia, corporate officers and limited liability company (LLC) members are considered employees, though up to five of these officers or members can apply for an exemption. However, the officers and LLC members still count towards the three or more employees. Workers’ compensation insurance also covers part-time employees, as long as they work regularly.

Workers’ Compensation Insurance Oversight

The Georgia State Board of Workers’ Compensation is the official board that oversees workers’ compensation claims and ensures fair resolution to disputed claims. The board encourages workplace health and safety and helps employees return to work after an injury.

Georgia law holds business owners who do not carry compensation insurance accountable for civil penalties and criminal penalties, if applicable. Employers may have to pay between $100 and $1,000 per violation. If found guilty of willfully neglecting to maintain workers’ comp insurance coverage (a misdemeanor), and an employer can face a fine of up to $10,000 and up to one year of jail time.

Industry Classification

In Georgia, insurance providers use the National Council on Compensation Insurance (NCCI) codes for industry classification. These codes are designed to account for the level of injury or illness risk associated with each industry.

Insurance companies use these codes to determine a client’s premium. To set the cost of a workers’ compensation policy, insurers use the following equation:

Payroll/$100 x Class Code Rate x Experience Modifier + Taxes & Fees = Premium

Ensuring You Have Quality Insurance

Finding the right insurance policy can be a daunting task, especially for new business owners. In Georgia, employers can purchase a workers’ compensation policy from a private insurance company, but Georgia does not have a state fund for workers’ compensation. However, eligible employers can apply for self-insurance, and the NCCI administers the Georgia Workers’ Compensation Assigned Risk Plan.

There is a lot of research involved when trying to find an insurance provider with the best rates and coverage based on your company’s unique needs. To make the insurance search easier, employers can:

  • Work with an Insurance Agent– New business owners should consider working with an insurance agent who can educate them about insurance law, show them their policy options, and provide insight into their employees’ benefits.
  • Request Numerous Quotes– When shopping around for a workers’ comp policy, be sure to request quotes from numerous companies; don’t settle for the first insurer that accepts you.
  • Look for Additional Services– An insurance company’s services shouldn’t be limited to just writing your policy. As you research workers’ comp providers, look for conveniences like an online portal. You may also want to choose a provider that offers other forms of insurance your business needs. Working with the same insurer for multiple policies can simplify the insurance process.

Workers’ Compensation Matters

Having workers’ compensation insurance is more than just a legal responsibility—it’s a means for taking care of your employees. With a policy from a trusted insurance provider, you can rest assured that your employees will receive quality care and fair compensation should an illness or injury occur.

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