What are workers' comp limits and what do I need to know about them?
- Coverage
- Workers' Comp Basics
A lot of business owners panic when they think about purchasing insurance, because they think theyâll have to make a lot of decisions about financial limits and deductibles.
Luckily, in the case of workersâ comp coverage, thatâs just not true.
Thatâs because workersâ comp limits are set by the stateânot by employers or insurance companies.
This means that each state has its own set of limits, which you wonât be able to adjust when you purchase a policy.
What does this mean for you? Basically, it means that you donât need to worry about workersâ comp limits. At all. You donât have to make any of those decisions.
All you need to do is provide the most accurate company information you can when you purchase a policy and your employees will automatically get the stateâs mandated coverage. Neat, huh?
Now, there is a bit of an exception to this (of course), but itâs pretty minor. It has to do with an obscure policy add-on called Employers Liability. This coverage only takes effect if you ever get sued by a third party over an injury claim (which is a pretty rare instance).
For example, say one of your employees got hurt while working for you and decided to sue the manufacturer of the equipment they were using at the time. Then, letâs say that the manufacturer of the equipment turned around and decided to sue your company for financial damages. Thatâs when Employers Liability would kick in, protecting your company from financial liability up to a certain limit that you select.
Like we said, this kind of instance is pretty rare, and because of that, Employers Liability is an inexpensive add-on. In fact, itâs so minor and costs so little that many small business insurance online providers will only offer one set of pre-defined limits. (Still no decisions. Hurrah!)