Dangerous occupations are one of the many reasons a remedy is needed for workers who are injured on the job. And accidents happen all the time, even in very safe work environments. Injuries aren't the only worry for both employers and employees. Illnesses can also be a risk in some occupations.
For example, Arizona firefighters are exposed to more than just flames and smoke. They often enter environments filled with burning, toxic chemicals that can lead to illness months or even years down the road. Firefighters who are exposed to burning chemicals are at a higher risk of developing certain types of cancers. In fact, Arizona firefighters are fighting to add ten different cancers to the list of work-related cancers already covered by Arizona workers’ compensation insurance.
When workers become ill or are injured in the workplace, workers’ compensation insurance is there to provide wage replacement and medical treatment benefits so employees can recover without oppressive financial burdens. Workers’ compensation insurance is required for Arizona employers.
Under Arizona law, employers with one or more full-time or part-time employees must secure workers’ compensation insurance. Arizona operates a no-fault workers’ compensation system in which an injured employee is entitled to receive benefits for a work-related injury or illness, regardless of who is at fault. If an illness or injury is job-related, the injured worker receives medical benefits and may receive temporary compensation, if eligibility requirements are met. In some cases, an injured employee may also receive permanent compensation benefits and job retraining.
All Arizona employers with one or more full-time or part-time employees must purchase workers’ compensation insurance. Workers’ compensation insurance also applies to minors, aliens, or family members of the employer.
Arizona workers’ compensation insurance covers 100% of all reasonable and necessary medical expenses related to an injured worker’s job-related illness or injury. Full medical benefits are provided with no time or cost limitations. In addition, injured workers may receive:
Arizona workers’ compensation can be purchased from an insurance company licensed to issue workers’ compensation insurance in the state of Arizona. Employers who meet certain requirements can apply for permission to self-insure.
Employers in high-hazard industries will pay more for workers’ compensation insurance than employers in low-hazard industries. If you have a good safety record, you may be rewarded with lower premiums than others in your industry.
Arizona workman's comp premiums are based on how many employees you have, your total payroll, the type of jobs performed at your business, and your history of accidents and workers’ compensation claims.
The Arizona Department of Insurance partners with the National Council on Compensation Insurance (NCCI) to set rates. Each occupation is associated with a classification code, and each class code is assigned a base rate that is recommended by the NCCI and approved by the state.
The base rate for your class code and your total payroll are used to determine your Arizona workers’ compensation premium. For example:
Most employers have employees in more than one classification. An electrician may employ a variety of office workers in addition to electricians. All of an employer’s class codes and related premiums are combined to determine the full Arizona workers’ compensation premium.
Rates for workman's comp insurance in Arizona are below average. They may vary among insurance companies based on underwriting standards and credits offered by individual insurers.
Experience rating is a way to increase or decrease your Arizona workers’ compensation premium depending on your actual loss experience.
When you are eligible for experience rating, an experience modification factor—or experience mod—is added to your workers’ compensation premium calculation. Your mod can have a significant impact on your premium as you establish a claims history. It is determined by comparing your actual claims to what was expected for your industry in a given year. If you operate a restaurant, you will be compared to other similarly sized restaurants. If you own a retail store, you will be compared to similarly sized stores in your state.
Your mod represents a debit or credit that is applied to your workers’ compensation premium.
By keeping claims and related costs low, you can control your mod and reduce your workers’ compensation premiums. If you have a lot of losses, your mod will likewise force your premiums upward. Remember that small, frequent losses have a greater impact on your mod than a few large or out-of-the-ordinary losses.
Remember, this article offers only highly simplified examples and calculations of typical Arizona workers’ compensation premiums. Arizona employers have a lot of options for workers’ compensation insurance. An independent insurance agent who understands your business and the Arizona workers’ compensation law can help guide you.
To learn more about Arizona’s workers’ compensation law and obtain coverage for your business, contact an experienced independent insurance agent today.