In December 2008, 18 Georgia construction workers were injured and one killed when a walkway that was under construction collapsed, dropping the workers some 40 feet. Some of the workers sustained serious brain and spinal injuries.
A disaster like this highlights the need for workers’ compensation insurance for construction companies and all employers. Accidents can happen at any workplace, no matter how safe. Worker injuries don’t have to be catastrophic to be costly; minor injuries happen all the time and cost employees thousands in medical costs and time away from work.
Workers’ compensation insurance allows employers to protect their employees and their businesses from the costs of workplace injuries.
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Georgia Workers’ Compensation Laws
The Georgia Workers’ Compensation Act defines the responsibility of employers to provide prompt medical and disability benefits for injuries sustained on the job by workers. In return, employees cannot sue employers for additional damages or benefits that are not provided under a workers’ compensation insurance policy.
In Georgia, employers who fail to provide workers’ compensation insurance as required by law are held responsible for compensable injuries in the same way as employers who have coverage. The Georgia Board of Workers’ Compensation may also assess attorney’s fees, civil penalties, and a 10% increase in compensation to employees if the employer refuses or neglects to purchase the required coverage.
The Georgia State Board of Workers’ Compensation Insurance is responsible for overseeing and administering workers’ compensation insurance in Georgia.
The Basics of Georgia Workers’ Compensation
Who Is Covered?
Employers with three or more full- or part-time employees are required to obtain Georgia workers’ compensation insurance. Employers with less than three employees may still be held liable to pay claims associated with worker injuries. Employees are defined as all persons, including minors, working full- or part-time under a contract of hire, written or implied.
Sole proprietors and partners are automatically excluded from coverage, but may choose to cover themselves. Corporate officers and LLC members are considered to be employees and are automatically included in coverage, but may elect to be excluded. A maximum of five officers or LLC members may exempt themselves from coverage. The exempted officers still must be included in the employee count for purposes of determining the employer’s obligations under the Workers’ Compensation Act.
Contractors and construction companies that hire subcontractors may be held liable for Georgia workmans’ comp insurance premiums for subcontractors who do not have coverage.
What Is Covered?
Georgia workers’ compensation insurance may provide covered employees with medical, rehabilitation and income benefits if they are injured on the job. It also provides benefits to dependents if an employee dies as a result of a job-related illness or injury. Employees are covered from their first day on the job.
Where Can You Buy It?
Georgia workers’ compensation insurance can be purchased from any agent or insurance company licensed to write it.
Employers who cannot obtain coverage in the voluntary market can obtain coverage through the assigned risk program, which is administered by the National Council for Compensation Insurance (NCCI), an independent rating and data collection bureau.
Employers who want to self-insure must file an application with the Georgia State Board of workers’ compensation.
How Much Does Georgia Workers’ Compensation Insurance Cost?
Premiums for Georgia workmans’ comp insurance are determined by the number of employees, the types of jobs that are performed, and the employer’s history of accidents and workers’ compensation claims. Georgia workers’ compensation insurance is more costly for high-hazard industries than it is for low-hazard industries.
Georgia partners with the NCCI to assign workers’ compensation rates for every occupation. The NCCI assigns classification codes to each occupation, and each class code is then assigned a workers’ compensation base rate that is used to determine the employer’s premium.
To determine your Georgia workers’ compensation premium, your annual payroll at the beginning of the policy period is divided by 100, and then multiplied by the base rate. For example:
- Classification Code 5022: Masonry
- Base Rate: $10.89
- Employer payroll: $100,000
- Premium calculation: $10.89 per $100 of employer payroll (or 10.89% of payroll)
- Estimated annual premium: $10,890
Most employers have employees in more than one class code. The masonry business above would combine all of its applicable classifications and related premiums to determine its annual Georgia workmans’ comp insurance premium.
Georgia Workers’ Compensation 2017 Base Rate Examples
Georgia workers’ compensation rates are slightly lower than the average national rates. Rates vary significantly among insurance companies in Georgia, based on underwriting standards. Insurance companies file their premiums with the Georgia State Workers’ Compensation Board.
Here are some sample base rates (rate per $100 of employer payroll) for Georgia as of March 1, 2016.
- 0042 Landscaping: $6.94
- 5183 Plumbing: $3.28
- 5427 Carpentry: $6.98
- 8017 Retail Store: $1.33
- 8810 Clerical: $0.12
- 9082 Restaurant: $1.50
What Is Experience Rating and How Does It Affect Your Premium?
Experience rating means that an additional factor called an experience modification factor, or experience mod, is applied to your Georgia workers’ compensation premium calculation. The mod can increase or decrease your premium for a given year. As you establish a claims history, your mod will have a big impact on your workers’ compensation insurance costs over time.
The mod is a numerical representation of your actual losses as compared to the expected losses for similarly sized businesses in your industry. Mods are assigned by the NCCI and are applied to your Georgia workmans’ comp premium as a debit or a credit.
- 1.0: Average mod, does not impact premium. All employers start out with a mod of 1.0.
- Greater than 1.0: Debit mod. Losses were worse than expected; premium goes up.
- Less than 1.0: Credit mod. Losses were better than expected; premium goes down.
The experience-rated workers’ compensation premium formula is as follows:
- Base Rate X Payroll X Mod = Premium
Debit and credit mods are applied to premiums:
- Premium: $100,000
- Mod: 0.75 (25% premium credit)
- Premium with mod credit applied: $75,000
- Premium: $100,000
- Mod: 1.0
- Premium is not adjusted
- Premium: $100,000
- Mod: 1.25 (25% premium surcharge/debit)
- Premium with mod debit applied: $125,000
Georgia employers are eligible for experience rating when they meet these criteria:
- $10,000 in policy premium generated during the last year or last two years, or
- $5,000 average policy premium generated for more than two years
How to Find Georgia Workers’ Compensation Insurance
Employers can obtain quotes and learn more about Georgia’s workers’ compensation requirements by working with an experienced independent insurance agent. The examples provided here are highly simplified illustrations of very complex rules, regulations and pricing models.
A local independent insurance agent can help you purchase a Georgia workers’ compensation policy that protects your employees and your business from the costs of workplace injuries and illnesses.
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