In May 2015, a chemical plant worker in Disney, West Virginia was severely injured when a carbon dioxide compressor blew up and injured his face. The worker lost partial sight in his left eye and had to undergo three surgeries to reconstruct his nose.
This is just one example of the types of workplace accidents that happen every day in West Virginia. If your business is not covered by a workers’ compensation policy, you may find yourself in a time-consuming and costly lawsuit.
In this particular case, a workers’ compensation policy would cover all medical costs related to the injury, lost wages for the employee, and a possible lump sum payment for the partial loss of sight.
Workers’ compensation insurance is not only a good idea, it is also required in the state of West Virginia. It protects your business from both sudden accidents like this one and injuries that happen over a longer period, such as back or neck injuries.
West Virginia requires all businesses, regardless of the number of employees, to carry a workers’ compensation policy. There are a number of exceptions when it comes to workers’ comp; here are just a few:
As with most states, West Virginia’s workers’ compensation program is a no-fault system. This means that employees are guaranteed benefits regardless of who is at fault if they are injured on the job. Employers are exempt from employee lawsuits in exchange for these guaranteed benefits, so they don’t have to deal with expensive and time-consuming lawsuits.
What Is Covered?
Workers’ compensation insurance in West Virginia pays out benefits to any employee who is hurt while performing their job. The coverage extends not only to sudden falls and accidents, but also to injuries that take longer to show themselves, such as back and neck injuries and repetitive stress injuries.
These policies will also cover long-term illnesses such as cancer that are a direct result of working conditions.
Workers’ compensation pays for all medical costs as well as lost wages for the injured employee. The policy will cover other treatments related to the injury such as physical therapy, and even job retraining if the employee cannot return to their original job.
A policy will also pay a death benefit if an employee is killed on the job, and pay a lump sum if an employee is permanently disfigured.
Who Is Covered?
All employees are covered, with some exemptions. Just a few occupations that are exempt are:
A West Virginia workmans' comp policy also protects your employees when they are out of the office, as long as they are performing work duties. Employees traveling for work, working at a client site or who are even at an out-of-state conference are all covered by your policy.
Where Can I Buy Worker' Compensation Insurance?
West Virginia allows private insurers to sell workers’ compensation policies, and there are currently over 260 carriers offering policies.
Workers’ compensation insurance is a complicated product; in most cases, it is best to talk to an insurance professional who has expertise in the workers’ compensation arena. This will ensure that your business is fully protected and you are in compliance with all state laws.
West Virginia uses the National Council on Compensation Insurance (NCCI) classification system to set class codes for employees. The West Virginia Office of the Insurance Commissioner sets the base rates for each class code, as well as experience modifier rates.
Base rates are designed to reflect how dangerous a particular job is when compared to other professions. High-risk jobs carry a higher base rate for workers’ compensation premiums when compared to careers that are considered less dangerous and have lower accident rates.
Class codes identify the different classes of workers and set a base premium for workers’ compensation coverage. Rates are reviewed on a yearly basis, so your workers’ comp rates will vary year to year.
Here is a quick example of class codes and base rates to help make all of this clearer and easier to understand:
West Virginia Classification Code: 5022 Masonry
Base Rate: $5.08
Employer Payroll: Example: $100,000
Premium Calculation: $5.08 per $100 or 5.08% of payroll
Estimated Annual Premium: $5,080
In almost all cases, a business will have more than one class of employee. A mason may work for a construction company that also employs heavy equipment drivers, as well as admin office personnel and accounting and sales staff. All of these employees would fall under different class codes.
In order to accurately calculate the premium for this business, the various class codes and premiums have to be totaled.
West Virginia does allow insurers to offer discounts on their workers’ compensation policies. Discounts will vary by insurer, but a few of the most common discounts offered are:
Here are just a few base rate examples for different class codes for 2016.
0042 Landscaping $3.62
3632 Machine Shop $2.21
3821 Salvage Yard $3.03
5022 Masonry $5.08
5183 Plumbing $1.32
5190 Electrical $1.43
5221 Concrete Construction $2.14
5437 Carpentry/trim $3.94
5474 Painting $3.14
West Virginia employers can take advantage of the experience modifier, or e-mod, program, which can raise or lower their workers’ compensation premium. The e-mod program is designed to reward employers that maintain a safe workplace and have fewer claims with a lower premium rate while penalizing businesses with a less-than-stellar accident rate with higher premium rates.
If your business has a higher accident and claim rate than other businesses that are roughly the same size and in the same industry, you will be issued a debit e-mod, which will raise your workers’ compensation premium. If you have fewer accidents and claims than other businesses in your industry, an e-mod credit will be applied to your account, lowering your workers’ compensation premium.
A new business is issued an e-mod of 1.0, which is neutral and will have no affect on premium. If your business has a bad year for accidents and claims, your rating will go above 1.0 and a debit will be applied to your premium. If you manage to stay claim-free and accident-free, your e-mod number will drop below 1.0, resulting in a credit.
In order to calculate your entire workers' compensation premium, you will need to multiply your base rate by your e-mod and then multiply that by your payroll for each employee class.
While most of the workers’ compensation program is beyond your immediate control, your e-mod number falls directly under your control. Maintaining a safe workplace and limiting accidents and claims can lower your premium dramatically.
In almost all cases, a number of small claims will have a more negative affect than one large claim.
The truth is that workers’ compensation insurance can be a complicated and the best way to find a great policy and make sure your business is in compliance with all state laws is to work with an insurance professional that specializes in workers’ compensation insurance.
A Trusted Choice® independent agent can scour the marketplace and find the policy that best suits your business. They can present you with all of your options and help make sure that you are receiving all discounts that apply to your business.
Get started today, contact a Trusted Choice agent to start shopping for a great workers’ compensation policy.