In August 2016, a motorist on Interstate 95 in Providence got a flat tire and contacted the American Automobile Association for assistance. The 47-year-old tow truck driver who responded to the call then proceeded to change the tire for the stranded driver. As he was working, a box truck traveling along the interstate struck the parked tow truck, then continued forward and hit the worker, who suffered two cracked ribs, a lacerated kidney, and cracked vertebrae.
In a case like this, the injured worker would receive workers’ compensation benefits to cover his medical treatment and lost wages. The injured worker would also have the option to sue the driver for pain and suffering and other miscellaneous losses not covered by workers’ compensation.
This is just one example of a time that a Rhode Island workers’ compensation policy was able to protect the interests of workers and employers in this state.
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What Are Rhode Island Workers' Compensation Laws?
Rhode Island workers' compensation laws require all employers in this state with one or more employees to carry workmans' comp coverage with a few exceptions. Employers are not required to cover the following workers:
- Independent contractors
- Those who work on a commission-only basis, such as real estate brokers, salespeople, and real estate appraisers
- Those who are sole proprietors or partners of a business
- Corporate officers and members of LLCs. (These workers are covered by Rhode Island workers’ compensation, but they have the option to exclude themselves from coverage.)
Rhode Island workmans' comp insurance is beneficial to both your business and your employees. Your employees do not need to worry that an on-the-job injury or occupational illness will result in unmanageable medical bills or lost income; and you, as a business owner, do not have to worry about facing expensive liability lawsuits related to these types of injuries. Workers’ compensation insurance enables your employees to quickly and easily obtain the coverage and compensation owed to them. When they accept this coverage, they forfeit their right to sue your business for negligence in the matter at a later date.
The Basics of Rhode Island Workers' Compensation Insurance
What Is Covered?
Rhode Island workman’s comp policies are designed to cover the costs related to occupational injuries and illnesses your employees may suffer, regardless of fault. These expenses can include immediate and future medical treatment costs, lost wages while the employee takes time off to recuperate, long-term disability, and even death benefits for family members in the event that an injury is fatal. In the accident on Interstate 95, the tow truck driver was fortunate that his truck absorbed most of the impact; otherwise, this might have been a fatal accident. Had that happened, his family would have been entitled to a death benefit payout to cover several years of lost income potential.
Covered injuries and illnesses can included those that are caused immediately by an accident, such as the one that injured the tow truck driver, as well as those that result from long-term exposure to a hazard, such as repetitive stress injuries or illnesses caused by frequently breathing in toxic substances.
There are instances in which an employee’s claim may be legally denied. These should be defined in the terms of each individual policy. The exceptions may vary slightly between insurers, but they typically include cases in which the injured employee:
- was under the influence of drugs or alcohol at the time of the injury,
- was committing a felony at the time the injury occurred,
- was injured in an act of workplace violence instigated by the injured employee,
- was acting in willful disregard of company safety policies
- suffered injuries that were deliberately self-inflicted.
If an employee feels that their claim was wrongfully denied, they may appeal the decision by filing a petition with the Appellate Division of the Rhode Island Workers’ Compensation Court.
Where Can You Buy Rhode Island Workman’s Comp Coverage?
Rhode Island is an NCCI state. That means that the state’s insurance departments have designated the National Council on Compensation Insurance (NCCI) as their licensed rating and statistical organization. Employers can purchase Rhode Island workmans' comp insurance in one of two ways:
- Through the private market: Employers can purchase coverage from any of the private insurers that are licensed to write a policy in the state.
- Through the state fund: This is for high-risk employers who find it difficult or impossible to purchase coverage on the private market. Currently in Rhode Island, all of these higher-rate policies are handled by Beacon Mutual Insurance Company.
Trusted Choice® insurance agents can help you find a Rhode Island workers’ compensation company that is suitable to meet the needs of businesses in your industry. Because they are just as interested in maintaining worker safety as you are, good companies will often provide you with information about safety standards and protocols that can keep your employees safe and ensure that you meet all OSHA requirements.
How Much Does Rhode Island Workman’s Comp Cost?
Insurance companies will calculate the cost of your Rhode Island workers' comp policy using a state-wide standard calculation that is regulated by the Rhode Island Department of Business Regulation. Your premiums will be based on the industry in which your company operates, your company’s total annual payroll amount, and your assessed risk factor for worker safety (expressed as an experience modification factor.)
Independent insurance professionals can help you understand Rhode Island workers’ compensation laws, as well as ways that your company may qualify for policy discounts so that you can find an appropriate policy and avoid overpaying for your coverage.
What Is an Experience Rating and How Does It Affect Your Costs?
In this state, companies that meet certain qualifications, based on how much they spend on workers’ compensation premiums, are assigned an experience modification factor, or experience mod. If your company is rated, your mod factor can affect your Rhode Island workers' compensation insurance rates.
An experience modification factor provides insurance companies with an indication of how your company’s claims history compared to other businesses of your size in your industry. When you report worker injuries, as required by law, your rating will increase. Severe injuries will result in higher increases, as will frequent injuries or work-related illnesses. These can affect your rating for three years. Each year that you go without any worker injuries, your mod will decrease. When it goes below 1.0, your company can qualify for policy decreases.
Experience mod eligibility rating requirements vary by state. In Rhode Island, businesses qualify to be experience rated if one of two things is true:
- $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
If your business is experience-rated, your Rhode Island workmans' comp premiums will be calculated using the following formula:
- (Base Rate) X (Annual Payroll) X (Experience Mod Factor) = (Annual Premium)
Your mod rating represents a debit or credit. The amount of the debit or credit will be applied to your workers’ compensation base premium as follows. If your experience mod is:
- Equal to 1.0: This will not affect your premium rate.
- Greater than 1.0: This is a debit mod, which means that your losses, based on injury frequency and severity, were worse than expected. Your base rate will be increased accordingly.
- Less than 1.0: This is a credit mod, which means that your losses due to employee injuries are better than expected within your industry, and your base rate will be decreased accordingly.
Here are some examples of how your experience rating can affect your Rhode Island workers’ compensation premiums:
- Premium: $50,000
- Mod: 0.75 (25% premium credit)
- Premium with mod credit applied: $37,500
- Premium: $50,000
- Mod: 1.0
- Premium is not adjusted: $50,000
- Premium: $50,000
- Mod: 1.25 (25% premium surcharge/debit)
- Premium with mod debit applied: $62,500
The best way to rein in your workers’ compensation rates is by establishing and maintaining a low experience modification factor. You can do this by taking suitable measures to safeguard your employees against potential injuries and illnesses. Workers’ comp insurance companies will often assist in this endeavor by providing you with resources and guidelines related to workplace safety and OSHA requirements.
Get Help Securing a Rhode Island Workers’ Compensation Policy
There are a number of different ways that workers can be injured on the job, and employers should be prepared for the possibility of any type of occupational illness or injury. Whether your employees are hurt in an accident, due to long-term exposure to hazardous materials, or even in the course of a robbery, you are responsible for providing suitable coverage. A workers' compensation insurance policy that is designed specifically to protect businesses in your industry offers you the best line of defense against these risks.
A local Trusted Choice agent who is familiar with the various aspects of commercial insurance coverage will be able to ensure that your company meets the requirements mandated by Rhode Island workers' compensation laws. These agents can help you review policies and quotes from reputable insurance companies so that you can rest assured that you will have the right coverage if the need arises. Find an agent near you to learn more and review quotes.