Workers’ compensation insurance is required for most employers in South Carolina. This makes sure that injured workers get medical care and income protection while they are unable to work. In addition, it prevents you from being sued for damage by your employees.
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What Is Workers' Compensation Insurance?
Workers' compensation insurance is also known as workman's compensation and provides benefits to employees who get injured or ill from a work-related accident. It also includes missed wages, disability benefits, and death benefits.
The Workers' Compensation Act in South Carolina requires that if an employee is injured or becomes ill by accident while employed, that person is eligible to recover medical expenses, missed wages, and disability benefits if they suffered a temporary or permanent injury as a result of a work-related accident.
A workers’ compensation insurance company will deny coverage for certain claims, such as willful self-inflicted injuries, injuries from being under the influence of drugs or alcohol, injuries occurring during events outside of work, and injuries occurring in the act of committing a felony.
What Are the Basics of the Workers’ Compensation Law in Florence, SC?
In South Carolina, if your business employs at least four employees, you are required to get workers' compensation insurance. If an employee is hurt or becomes ill on the job and the employer did not have the mandatory workers’ compensation insurance in South Carolina, the state may take the business’s assets to cover the cost of any claims.
Although South Carolina requires employers with at least four employees to have workers' compensation insurance, there are few exceptions, which include the following:
- Licensed real estate agents working for a broker
- Railroad or railway express company employees
- Federal employees of the state
- Agricultural employees
- Employers with less than $3,000 in annual payroll for the previous year
- Casual employees, who do not work regular hours
- People selling agricultural products
What Does Workers’ Compensation Cover in Florence, SC?
Disability benefits: Workers’ compensation insurance provides coverage to employees for medical costs associated with work-related injuries or illnesses, including emergency room visits, treatments, surgeries, and prescriptions.
Missed wages: If an employee gets injured or ill on the job, workers’ compensation can help replace their lost income if they must take time off from work.
Ongoing care: Sometimes work-related injuries or illnesses can be serious enough to require multiple doctor visits. Workers’ compensation insurance can help cover their ongoing care costs, such as physical therapy.
Funeral costs: If an employee dies while on the job, workers’ compensation coverage can help pay their funeral costs and provide death benefits to the employee’s beneficiaries.
Say one of your drivers gets into an accident and loses the use of one of their arms and is partially disabled because of a work-related accident. They are not able to return to work and need continued medical and financial support. Workers’ compensation insurance helps cover treatment costs and replace some of their missed wages through disability benefits.
Who Does Workers’ Compensation Cover in Florence, SC?
There are many factors that determine which employees need workers’ compensation insurance. For instance, specific jobs and the size of a business play a big role. Even though requirements vary from state to state, most of them require workers’ compensation coverage for full-time employees. Some states do not require workers’ compensation coverage and include the following jobs:
- Family members under a certain age
- Casual workers
- Federal government employees
- Real estate agents
- Business owners and partners
- Insurance agents
These exceptions do not apply to every state, so it is crucial you understand your state’s workers’ compensation laws.
How Much Does South Carolina Workers’ Compensation Cost?
A workers’ compensation insurance quote will be based on four main components: classification code (industry), claims history, location, and payroll.
- Location: Workers’ compensation is controlled at the state level, which means rules and rates will vary from one state to another.
- Payroll: Although the state requirements for coverage depends on the number of employees you have, premiums are based on total payroll, including full-time, part-time, and temporary or seasonal workers.
- Classification code: Your business is calculated based on the jobs performed and the potential risk for physical illness or injury.
- Claims history: Your claims history is used to assess how safe your work environment is and how likely you are to have claims in the future. Any claim, no matter the size, will affect your premium. Equally, a lack of past claims indicates a safe work environment and may lower your premium.
South Carolina Workers’ Compensation 2020 Base Rate Examples
For the most part, workers’ compensation benefits are calculated and paid based on an employee’s average weekly wages. This is calculated by multiplying the employee's daily wage by the number of days worked in one full year. You then divide that number by 52 weeks to get the average weekly wage.
Next, you add together the benefit and incentive costs, hiring, salary, and payroll taxes to determine the total compensation costs. If you would like to find the monthly compensation cost, calculate the quarterly or annual costs, and divide by 3 or 12, respectively.
Listed below are some sample base rates (rate per $100 of employer payroll) as of 4-1-2020. These rates are published annually by the South Carolina Department of Insurance and are subject to change every year.
- 9620 Funeral director and drivers: $0.93
- 9186 Amusement device operator: $10.92
- 3612 Pump manufacturing: $1.45
- 8017 Retail Store: $1.20
- 8810 Clerical: $0.14
- 4239 Paper manufacturing: $1.96
- 5645 Carpentry: $16.22
Apparently, it costs significantly more to insure workers in the amusement device industry, where serious injuries are more likely than it does to insure a funeral director.
The Workers’ Compensation Statute of Limitations In South Carolina
In South Carolina, it is the responsibility of the employee to notify the employer of a work-related injury or illness as soon as possible, but it must be within 90 days of the injury or illness. The injured or ill employee must file a claim within two years with the Workers’ Compensation Commission (WCC).
Additionally, if the employee does not inform either the employer or the WCC on time, they forfeit their right to make a claim. Additionally, it is the employer’s responsibility to buy the right workers’ compensation coverage through a licensed insurance company.
What Is an Experience Rating and How Does It Affect My Costs?
In South Carolina, some of the larger companies are given an experience modification factor or experience mod. This factor can affect your South Carolina workers' compensation premium.
Your experience mod provides a sign of how your safety record and workers’ compensation claims equate to other businesses of your size in your industry. Companies with a higher experience mod will have to pay higher premium rates.
Experience Rating Eligibility (EMR): South Carolina employers receive an experience modification rate or EMR once they meet one of these triggers:
- $9,000 in policy premium is generated during the last year or last two years
- $4,500 is the average policy premium generated for more than two years
If your workers' compensation policy is experience-rated, your payments are determined with the following formula:
- Base Rate X Payroll X Mod = Premium
Your modification rating represents a debit or credit that will be applied to your workers’ compensation base premium accordingly.
- A mod of 1.0: This is an average rating and is where all businesses start when they are experience-rated. A mod of 1.0 will not affect your premium rates.
- A mod greater than 1.0: This is also referred to as a debit mod. It signifies that your company’s injury occurrence and severity rate is worse than expected for a company of your size in your industry. Your payments will increase according to your experience mod.
- A mod less than 1.0: This is also referred to as a credit mod. It signifies that your company’s injury frequency and severity rate is better than expected for a company of your size in your industry. Your premiums will be discounted according to your experience mod.
Accidents at your business property can impact your experience modification rating for three years. Consequently, if you go years without a workers’ compensation claim, it will make your modification factor drop.
If you want to keep your South Carolina’s workers’ compensation expenses down, the best way to do so is to maintain a low rate of employee injury. This can be done by establishing safe practice procedures and by keeping your employees informed about how they can avoid injuries while at work.
How Can an Independent Agent Help Your Florence, SC, Business?
You can protect your company from the risk of substantial liability claims by investing in a qualified South Carolina workers’ compensation insurance policy. Having this coverage may even make your business more attractive to qualified employees.
You can learn more about your options and easily review rates by working with a local TrustedChoice.com independent insurance agent. These independent insurance agents are available to answer your insurance-related questions and help you find the best insurance companies to meet your coverage needs. Find an agent near Florence, SC, to get more information.
TrustedChoice.com Article | Reviewed by Jeffrey Green
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