A self-employed contractor was injured in a Delaware Home Depot store when a stack of 18 wooden doors fell from a shelf above him. The man was so severely injured he remained unable to return to work after two operations on his back.
While this is an extreme example, back injuries are common in the workplace, even in jobs where you might not expect them to occur. Employees with dangerous occupations can get seriously injured, and even office workers can be victims of trips and falls, repetitive motion injuries, and other far more serious accidents.
No matter what type of work your employees do, it is your responsibility as an employer to help them pay for medical expenses if they are injured on the job. Workers’ compensation insurance is required for most employers in Delaware. It ensures that injured workers get medical care and income protection while they are unable to work. And it also prevents you from being sued for damages.
The Delaware Legislature created the state workers’ compensation system in order to provide benefits to workers who are injured or contract an illness while on the job. Employers are prohibited from charging employees for any portion of the premium or expense of carrying workers’ compensation insurance. Employees must meet certain entitlement requirements in order to receive benefits.
Delaware’s workers’ compensation laws are established and administered by the Delaware Department of Labor, Division of Industrial Affairs Office of Workers’ Compensation.
Employers with one or more employees are required to carry workers’ compensation insurance in Delaware. Farm workers are exempt from this requirement; however, agricultural employers may elect to provide the coverage. There are a variety of other exclusions and exemptions:
Delaware workers’ compensation insurance pays for all necessary medical treatment and hospitalization services related to a work-related injury or illness. In addition, Delaware workers’ compensation provides the following benefits for injured workers:
Delaware workmans’ comp insurance also pays death benefits to a worker’s dependents when a job-related accident or illness results in death.
Delaware workers’ compensation insurance can be purchased from an insurance agent who is licensed to sell workers’ compensation insurance in the state. Employers can self-insure with approval from the state. Because of the small size of the state, there are relatively few insurance carriers who offer workers’ compensation insurance in Delaware.
If you cannot obtain insurance through the standard workmans’ comp market, coverage is available through the Delaware Workers’ Compensation Insurance Plan (DIP). The DIP is the carrier of last resort for employers who cannot obtain coverage elsewhere; rates are up to 50% higher than private carriers, and a surcharge is also applied to every policy.
Delaware is a competitive ratings state, which means it allows private carriers to offer workers’ compensation insurance to employers in the state. While most states use the National Council on Compensation Insurance (NCCI) to set and regulate rates, Delaware does not.
The Office of the Insurance Commissioner and the Office of Workers’ Compensation set the workers’ compensation rates for Delaware employers. The Delaware Compensation Rating Bureau (DCRB) administers all rules, approves plans, and manages the Delaware State Fund.
Workers’ compensation rates in Delaware are quite high due to lack of competition among private carriers. In fact, Delaware’s workers’ compensation rates are the 9th most expensive in the U.S.
For individual employers, workmans’ compensation insurance premiums are based on the number of employees, total payroll, employer class code, and the employer’s history of accidents and workers’ compensation claims. The annual payroll at the beginning of the policy period is divided by 100, and then multiplied by the approved base rate for the employer’s class code.
This machine shop probably has employees in more than one classification. All of its applicable classifications and related premiums are combined to determine the full Delaware workmans’ compensation insurance premium.
Workers’ compensation premiums in Delaware may vary somewhat among similar employers based upon the carrier’s underwriting standards, an employer’s experience rating, and state-approved discounts.
The Delaware Office of Workers’ Compensation assigns base rates for each employer class code in the state. Each class code is assigned a low rate and a high rate.
Here are some sample low rates (rate per $100 of employer payroll) as of December 1, 2015.
After you establish a workers’ compensation claims history, experience rating makes a significant difference in what you pay over time. An experience modification factor, or experience mod, is an additional factor that may be applied to your workers’ compensation premium calculation. It increases or decreases your workers’ compensation premium for a given year.
Your mod is a numerical representation of your actual losses compared to expected losses for your industry (plumbers are compared to plumbers, restaurant workers to restaurant workers, etc.).
Delaware experience mods are calculated by the DCRB. Your mod represents a debit or credit that is applied to your workers’ compensation premium.
You cannot control your industry classification or the degree of risk that is inherent in your business. But you can control your mod by keeping claims and related costs low.
This article offers only highly simplified examples and calculations of typical workers’ compensation premiums. For most employers, purchasing workers’ compensation is complex and requires the help of a trusted advisor. A Trusted Choice® insurance agent can help you learn more about the workers’ compensation laws in Delaware, and can help you obtain coverage for your business.
Start your search for a local Trusted Choice agent now.