Workers’ compensation insurance is designed to protect you and your employees financially in the event of a workplace accident or unjust. Workers’ compensation insurance isn’t just a good idea, depending on your state it may be a legal requirement. When it comes to workers’ comp claims, the majority of them are approved because workers’ compensation is considered “no-fault”. Meaning that employees do not need to prove that their employer was at fault for their injury.
As long as the employee files their claim on time, has witnesses to their accident, and seeks medical treatment for their injury, the employee will receive benefits. There may come a time, however, when one of your employees files a claim that you find questionable. In this case, you do have options, including the option to contest the claim. Below we’ll look at how you can fight a questionable claim. As well as the impact workers’ compensation claims can have on a business.
Reasons To Dispute A Workers’ Comp Claim
You can’t fight a workers’ comp claim for no reason, you and your insurance company must have a legal basis for disputing any claims. Here are some of the reasons you could have for disputing a claim:
Your employee missed the deadline to file a claim
The wrong paperwork was used to file a claim
The injury didn’t happen at your company
Your employee quit before filing a claim
The injury happened while the employee was at work but was not working
The injury was intentional
Always File The Claim
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job.
Work With The Claims Adjuster
Once you’ve filed the workers’ compensation claim with your insurance company, an adjuster will be assigned to the case. They will contact you and the employee personally, as well as review all documents associated with the case including medical records. The adjuster ultimately decides if the claim will be denied, but at this point you will have more information about the claim than the adjuster. If you have reason to believe the employee lied, or was injured outside of work, now is the time to gather all information that supports why you think it’s invalid. Document, date, and save everything that indicates why you think the claim is fraudulent. Most importantly, inform your adjuster immediately that you believe the claim to be questionable. Indicating in your initial report that you believe there are reasons to deny the claim serves 2 purposes.
First, it lets the adjuster know they may need to file an extension early, since workers’ compensation claims have to be completed in a certain time frame, and disputing a claim will take more time to investigate. Secondly, marking your claim as questionable from the beginning will actually make your adjuster pay closer attention. They will spend more time looking through the paperwork, medical records, and searching for warning signs that otherwise may have been missed. Finding one of these red flags doesn’t necessarily mean anything, as accidents and coincidences do happen. But if an adjuster notices that more than one exists, they will look into it further to make sure if the claim is or isn’t fraudulent.
Warning Signs
A new hire who immediately filed a claim after being hired
An employee who has immediately hired an attorney after the injury
Claims from an employee who may have been “disgruntled”
Employees with poor attendance, poor work records, or financial issues
Injuries with no witnesses, or that happened in an area the employee isn’t assigned to normally work
Injuries that occur late on a Friday or right when they return to work on Monday
Learn Your State’s Procedure
While workers’ comp is mandatory in almost every state, each state has its own laws and procedures for dealing with claims. Including disputing them. You can call your insurance provider and ask about what you need to know about local procedures. So you don’t accidentally make a misstep and cause trouble for yourself or your company.
You have the option to dispute even if the adjuster doesn’t deny the claim after the investigation. In some states, such as Texas, you have to submit a form or attend a hearing to dispute the claim in front of a judge. In other states, such as New York, or Tennessee, you may have to appear before a judicial panel or speak with a state-assigned workers’ compensation arbitrator. However, regardless of the state your company is in, you will most likely have to defend your position orally, in writing, or both. You will also need to provide all of the evidence you gathered when you first filed the claim and informed the adjuster of your concerns. Remember the “document, date, and save all information” part? This is where that step comes in handy.
How Workers’ Comp Claims Affect Businesses
Workers’ compensation claims tend to have a greater impact on smaller businesses. This is because larger companies have deeper pockets and larger payrolls, allowing them to absorb the financial cost with not much issue. Regardless of how big or small your business is though, workers’ comp claims can cause your business issues. Below we’ve detailed how claims can affect you. So, you understand why it’s important to fight fraudulent claims to protect yourself. As well as explain why doing everything you can to avoid workplace accidents is even more important.
Premium Hikes
Your workers’ compensation insurance premiums are determined by your industry, number of employees, payroll, and claims history over the last 3 years. A single claim will not necessarily result in a higher premium. But depending on the nature of the claim and the resulting medical bills and disability benefits even one claim could make a mark on your record. The more often you have workers’ compensation claims the more likely it is that your premiums will increase.
Additionally, your insurer also takes your experience modification rate (EMR) into consideration. Your EMR is how insurance companies compare your claims history to other companies in the same industry. The average EMR is 1.0, the more claims you have the higher above average you are. And then the higher your premiums will be because your company will be considered a higher risk to insure. Regular safety training and following industry-specific safety guidelines can help reduce your premiums.
Administrative Costs
Processing a workers’ compensation claim can take a lot of time. Especially if you’ve signaled that you believe it’s fraudulent. The insurance company will want to examine all relevant evidence, including the employee’s medical records. Effectively giving you or your claims specialist more work to do. Your company may also need to spend a lot of time and money to fix or check any equipment that was involved. As well as repair it if needed. Especially if the machinery involved is found to be defective after the accident. There may also be more paperwork and more hours involved in reporting the incident to state and federal regulators. Particularly if an OSHA violation is suspected. New equipment or training that stems from a regulator’s requirement can take a chunk out of your bottom line.
Legal Action Expenses
If you believe it is false, and you decide to take it to court you could also end up paying. While your attorney will advise you on whether or not you should go to court in the first place. Keep in mind if you lose the case, you will have significantly higher legal fees than you would have if you settled the claim. So, if you are planning on disputing your claim make sure your legal team agrees with the decision. And that you have absolute proof that the claim was fraudulent.
Reputation Damage
Impact on your company’s brand is difficult to predict. Your reputation can be affected by the severity of the accident. Whether it is covered by local news outlets, and whether it spreads on social media. A serious accident, repeated incidents, or OSHA fines could make it difficult to be able to hire new employees or get new customers.
Working With EZ
Workers’ compensation isn’t just about protecting your employees, it’s also about protecting your business. Nobody wants to deny a legitimate claim. But if you encounter one of those rare cases it’s fraudulent, you should know you have rights as well. And remember, EZ.Insure is here to help if you have any questions about workers’ compensation insurance. Or any other commercial insurance for that matter. We will connect you with a highly trained licensed agent. Who will listen to all of your concerns and make sure you get the best policy. To get started, enter your zip code in the box below or call 977-670-3538 to speak with an agent today.
Virtually every employer has to carry workers’ compensation insurance. However, some state laws provide exemptions for particular types of employees and business structures. Only a few worker categories are occasionally exempt. This exemption also applies to certain business owners. However, even when workers’ compensation coverage is not required, it is almost always in the best interest of the employer to provide coverage. If an employee sustains an injury on the job the employer may be held responsible for medical expenses, ongoing therapy, and lost wages.
Additionally, if you as the business owner are injured on the job, a workers; compensation policy can help pay for your medical expenses and compensate you for a portion of your lost wages. Your personal health insurance provider may deny your claim if your injury or illness is work-related, leaving you again responsible for these costs. Below we’ll look at the exemption laws in each state, if you’d like more information on the other workers’ compensation laws in your state, check out our state workers’ compensation guides here.
Any business with 4 employees or less does not have to carry workers’ compensation in Alabama, whether they are full or part time doesn’t matter. Alabama employers do not need to carry workers’ compensation for farm laborers, domestic laborers, or casual laborers including temporary or part-time employees hired for only an hour or a day.
Alaska businesses with one or more employees have to have workers’ compensation coverage unless the Alaska Workers’ Compensation Board has approved the business for self-insurance.
Owners and business executives are exempt if they are:
Sole owners
Partners
LLC owners with at least 10% ownership interest in the company
Executive officer or municipal, religious, or legally registered nonprofit organizations.
Executive officers for for-profit corporations with at least 10% ownership.
As for employees who are exempt from coverage:
Part-time babysitters
Non-commercial house cleaning personnel
People who are hired to help a farm with harvest
Amateur event sports officials
Entertainers under contract
Commercial fishers
Taxi drivers under specific contractual arrangements
Anyone who has benefits through the Alaska temporary assistance program.
Professional hockey players and coaches, as long as they are covered under a health insurance plan.
Some real estate agents
Anyone defined as a transportation network company driver.
There are only 4 exemptions from Arizona’s workers’ compensation. Independent contractors and casual laborers do not need to be covered. As well as any employee who voluntarily chooses to not have workers’ compensation coverage. The only owners who do not have to have coverage are sole owners who have no employees. Beyond that, any business owner with one or more employees needs workers’ compensation coverage.
All employers have to carry workers’ compensation insurance for themselves and their employees. The only exceptions to this are sole owners who opt out of coverage for themselves, or employers who have approval to self-insure.
Connecticut is another state that requires all businesses to carry workers’ compensation insurance with very few exceptions. The only employees that don’t need coverage are domestic workers who work less than 26 hours a week. Sole owners, corporate officers, and partners are allowed to opt out of coverage for themselves but they must have coverage for their employees.
Farm laborers and household workers in a private home who earn less than $750 every 3 months do not need workers’ compensation insurance. Other than that every other business owner and employee needs to be covered.
Any employer with one or more full-time, part-time, permanent, or temporary employees has to provide workers’ compensation coverage. Exemptions include:
If you have a single employee, even a part-time worker, you have to purchase workers’ compensation insurance. Only sole owners, partners, corporate officers, and real estate agents are excluded.
All Kansas companies must have workers’ compensation insurance with only a few exceptions. Some agricultural workers do not need to be covered. Sole owners, partners, corporate officers, and independent contractors with no employees do not need workers’ compensation insurance.
Employers who regularly employ one or more employees for 35 or more hours per week for 13 or more weeks in the 52 weeks prior must provide coverage. Exemptions include:
Agricultural workers (fewer than three employees working less than 35 hours per week)
Domestic workers (fewer than three employees working less than 35 hours per week).
All employers must provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Domestic or household employees whose typical responsibilities include house cleaning and yard work
Casual employment
Only those working for assistance or sustenance
Officials of amateur athletic competition, such as a timer, referee, umpire, or judge.
Real estate, securities, and insurance salespeople paid solely on commission with no minimum earnings guarantee
Direct sellers
Those who deliver single or multiple newspapers and have acknowledged in writing that they have no insurance coverage.
Freelance correspondents who submit articles or photographs for publication are compensated for each submission but have not confirmed coverage in writing.
Barbers and cosmetologists who have contracts with cosmetology salons.
Petroleum land specialists
Licensed jockeys participating in a horse race, from the time the jockey reports to the scale room until the jockey is weighed out after the race.
Licensed trainers, assistant trainers, exercise persons, and pony persons on the premises of a licensed horse race meet.
Non-Montana residents whose primary duties are not performed outside the state. The employer must adhere to the coverage requirements in the location where the employee resides or works.
Officers or managers of a private, non-profit irrigation ditch company, water user cooperative, corporation, or organization.
A minister who is ordained, commissioned, or licensed by a church or religious order.
Individuals who provide companionship services or respite care to incapacitated individuals. The individual providing services or care must be directly employed by a family or legal guardian.
Excluding air search and rescue volunteers, volunteer reserve auxiliary law enforcement, and volunteer firefighters, volunteer workers are defined as:
Professional athletes who compete in contact sports for a team or club
Personnel of freight brokers and forwarders
A musician whose performance is governed by a written contract
Employers with at least one employee have to provide coverage. Exemptions include:
Employment associated with entities engaged in interstate commerce that are not subject to Nevada’s legislative authority
Employment covered by private disability and death benefit plans comprising compensation payments of equal to or greater amounts than those provided in NRS 616 and in effect for at least one year prior to July 1, 1947.
Temporary employees insured in another state who are brought into Nevada if extraterritorial coverage provisions are in effect with the other state.
Casual employment in the construction industry (employment lasting less than 20 days with a total labor cost of less than $500), if the employment is not in the course of the employer’s trade, business, profession, or occupation.
Employers with at least three employees have to provide coverage. Exemptions include Sole proprietors. However, sole proprietors are counted as employees when determining whether a business employs three or more individuals.
All employers must provide coverage. Exemptions include:
Volunteers who provide their services to nonprofit organizations without compensation
Ministers, priests, and rabbis duly ordained, commissioned, or licensed; sextons; Christian Science readers; and sects of religious orders
Customers of supervised amateur athletic activities operated on a nonprofit basis, provided that such s are not otherwise engaged or employed by any person, firm, or corporation participating in such athletic activity Educators in a nonprofit religious, charitable, or educational institution
Individuals employed in a nonmanual capacity by or for a religious, charitable, or educational organization.
Persons receiving charitable aid from a religious or charitable institution who perform work in exchange for such aid, but who are not under an express contract of hire, are considered unpaid volunteers.
People who are covered for specific types of employment under another workers’ compensation system, such as those employed in certain maritime occupations, interstate railroad employees, federal government employees, and others who are covered by federal workers’ compensation laws.
The spouse and minor children of a farmer-employer, provided they are not under an express contract of employment.
Certain foreign government and Native American Nation employees
Provisions of the New York State General Municipal Law that protect New York City police officers, firefighters, and sanitation workers
People, including minors, performing yard work or casual chores in and around a single-family, owner-occupied residence or a noncommercial organization’s property.
Certain real estate salespeople who sign a contract with a broker stating that they are independent contractors are considered independent contractors.
Certain media sales representatives who sign a contract stating they are independent contractors are considered independent contractors.
Certain insurance agents or brokers who sign a contract stating they are independent contractors are considered independent contractors.
Sole proprietors, partners, and certain corporate officers with no additional personnel providing essential business services.
Employers with at least one employee have to provide coverage. Exemptions include:
Sole proprietors, partners, and officers of corporations
Some railroad personnel
Casual employees
Domestic servants employed directly by the household
When less than ten full-time, non-seasonal farm laborers are regularly employed by the same employer, they are considered farm laborers.
employees of the federal government in North Carolina
Those who sell agricultural products for their producers on commission or for other compensation, provided the product is prepared for sale by the producer.
All employers must provide coverage. Exemptions include:
Independent contractors
Some agricultural employees
Certain providers of services administered by the Oklahoma Department of Human Services who are licensed and compensated on a commission-only basis
Any employee of an employer with five or fewer employees who are all related to the employer by blood or marriage. Any employee of a tax-exempt youth sports league.
Sole proprietors, partners, and officers of corporations
Any individual who performs volunteer work and receives no remuneration other than meals, drug or alcohol rehabilitation therapy, transportation, lodging, or reimbursement for incidental expenses is considered a volunteer.
Unlike most other states, South Dakota employers do not legally have to carry workers’ compensation insurance. To avoid civil lawsuits, however, the state encourages employers to have workers’ compensation coverage.
Employers with at least three employees are required to provide coverage. Exemptions include sole owners. However, sole owners are counted as employees when determining whether a business employs three or more individuals.
Employers with at least three employees have to provide coverage. Employers with fewer than three employees who pay wages of at least $500 per calendar quarter must also carry workers’ compensation insurance. Exemptions include some farm laborers.
Employers with three or more workers must provide coverage. Employers with fewer than three workers who pay at least $500 in wages per calendar quarter have to carry workers’ compensation insurance. Exemptions include some farm workers.
Workers’ Compensation Made EZ
Most states require businesses to carry workers’ compensation insurance, which will not only protect your business but also your employees. Keeping your employees safe does not have to be an expensive endeavor for your company. There are numerous ways to promote safety routines and programs, all of which will help you reduce your workers’ compensation costs. If you use the best practices for claims management and follow them in a timely manner, your employees will be able to return to work as soon as they receive medical clearance to do so. Not only will production return to normal, but workers’ compensation costs will get cheaper as well.
Come to EZ for free, instant quotes from one of our agents if you are looking for the best workers’ compensation policy. And if you already have workers’ compensation benefits but are looking for a better deal, we can assist you. Your EZ agent will be familiar with the local laws and able to guide you as you shop around for the best policy at the most affordable price. Enter your zip code in the box above or call us at 877-670-3538 to speak with one of our agents.
Every business that has employees should have workers’ comp insurance. In fact, this type of coverage is required in most states. But even if it weren’t required to have it. You would still have a responsibility to protect your business and its employees from the legal and financial risks associated with workplace injuries.
These policies typically cover most workplace injuries and illnesses caused by workplace conditions. But workers’ compensation cases aren’t always black and white. They definitely cover things like repetitive stress injuries, traumatic brain injuries, broken limbs sustained after a fall, etc. But what are the limits? What or who is does workers’ compensation not cover?
Workers’ compensation insurance is among the simpler types of commercial insurance policies to understand. Simply put, if one of your employees sustains an injury on the job, the policy will be cover them. Employees benefit from compensation for medical expenses and lost wages, and businesses save money by avoiding lawsuits.
But in reality, though, things are not always so straightforward. Some workplace injuries may raise doubts in the minds of employers. What if, for instance, a worker sustains an injury on the job, but the incident was entirely their own doing?
In this case, you should know that workers’ compensation is no-fault. Which means that employees who are injured due to their own carelessness are still entitled to benefits. However, this still has its limits. For example, an employee’s claim will be denied if the incident that led to the injury occurred while the worker was under the influence of alcohol or drugs.
In addition, workers’ comp generally covers repetitive stress injuries like carpal tunnel syndrome and asbestosis. But when it comes to repetitive stress injuries like chronic back pain or diseases like heart disease or high blood pressure, things become a little murkier. An employee claiming that one of these conditions is from work must provide overwhelming evidence.
So, let’s clear things up a little and look a little more closely at what isn’t covered by workers’ compensation.
Examples of Injuries Workers’ Compensation Won’t Cover
Workers’ compensation insurance covers most injuries on the job or when an employee is off-site but still working. Injuries employee injuries in the workplace must be evaluated on a case-by-case basis. There are exceptions to coverage, including:
Driving to or from work – If an employee is hurt while commuting to or from work, the injury is not considered to have occurred in the course of their employment. As a result, the employee is not eligible for compensation unless they were driving specifically for their job.
Injury while intoxicated – If an employee sustains an injury while under the influence of an illegal substance or while intoxicated, and if the employee’s intoxication is the only cause of the injury, the injury will typically not be covered by workers’ comp.
Horseplay – Playing around at work, in general, does not contribute to the success of the company, which is why an injury that results from such an activity is not covered by insurance. But there is an exception to that rule. If an employee gets an injury during the incident but wasn’t directly part of the horseplay, the rule will not apply to the employee.
Intentional actions – In the event that a worker intentionally brings about their own injuries or illnesses while on the job, workers’ compensation will not cover them.
Illegal activities – Workers’ compensation won’t cover injuries of workers as a result of illegal activities on the jobsite.
Policy violations – Employees who sustain injuries while acting in a manner that is contrary to the company’s policies, procedures, or protocols are not covered by workers’ compensation.
Ex-employees – Unless the injury occurred before the employee was terminated from their position. Former employees who have been fired or laid off from their jobs will no longer be covered by workers’ compensation insurance.
Are All Employees Covered?
Workers’ compensation coverage requirements vary by state, as well as by the number of employees and their classification codes. For example, manual laborers are classified differently than office workers for workers’ comp purposes. Some states, for instance, mandate workers’ comp insurance only for businesses with a specific number of employees. In general, though, all full-time employees must be covered by workers’ compensation insurance, but the specific regulations may vary from state to state. Workers’ compensation laws for freelancers, temp workers, and interns are not standardized across the country.
In some states, workers’ compensation insurance is optional for:
Farmhands
Insurance agents
Family members under a certain age
Casual workers
Business owners and partners
Real estate agents
Most state laws also list specific types of employment excluded from workers’ compensation coverage. Typical examples of excluded workers include:
Part-time domestic workers, such as maids and nannies
Part-time gardeners or maintenance workers employed in the home to perform specific work.
intermittent workers performing very little work in the course of a year.
Taxi drivers
Some agricultural workers
Workers’ compensation insurance is typically required by states, but the federal government does not provide its employees with this protection. Instead, they are protected by federal workers’ comp.
These exemptions are not universal, and you should be aware of the workers’ compensation laws in your state. Check out our state-by-state workers’ comp guides for more specific information on laws in your state.
Is There a Workers’ Compensation Claim Deadline?
The majority of the time, the rules governing workers’ compensation work in the employee’s favor. On the other hand, though, employees cannot decide to make a claim for an injury that occurred years ago.
Although there may be some exceptions to these rules. In general, a claim for workers’ compensation benefits has to be made within a certain amount of time in order to be considered. Employees usually have between one and three years from the date of the accident to notify their employer and file a complaint with the state from the time the accident occurred. This time period varies from state to state. Check out our guides to workers’ compensation in each state to get an accurate estimate of the amount of time your employees have to file claims, as well as how long the claims process generally takes.
Does Where an Employee Gets Injured Matter?
The vast majority of injuries that occur while working are covered by insurance, with a few exceptions. But is it necessary for an employee to actually be present at their place of business? In the vast majority of cases, it doesn’t make a difference where the employee is located, as long as they are working; in fact, they could even be traveling between different locations.
Take, for instance, a scenario in which your employee sustains an injury while traveling to or from work. Because they were not carrying out any work-related responsibilities, they would not be eligible for workers’ compensation benefits. Suppose on the other hand, that a contractor must travel from one location to another in order to check on worksites or deliver supplies. Because the contractor was carrying out their duties at the time of the injury, they would be eligible for coverage in the event that they were in a car accident.
Workers’ Comp Laws for Federal Employees, Railroad Employees, and Longshoremen
Workers’ compensation benefits for federal employees, railroad workers, and longshoremen (dock workers) are administered by separate systems from those administered by individual states.
Postal workers and other federal employees have access to benefits under the Federal Employees’ Compensation Act (FECA). Injury and illness on the job are covered by this law.
The Federal Employers’ Liability Act, also known as the Railroad Workers Act, provides protections for railroad workers. In the event of an industrial accident on the railroad, this law allows employees without workers’ compensation to sue their employer. they may get compensation for expenses such as medical care, lost wages, and pain and suffering.
The Longshore and Harbor Workers’ Compensation Act governs workers’ compensation for longshoremen who sustain injuries or occupational diseases while working on U.S. navigable waters or piers.
There are workers’ compensation lawyers who focus on these types of situations. If you are a federal employee, railroad worker, or longshoreman and you get an injury on the job, you should hire a lawyer who focuses on workers’ compensation law.
EZ Can Help
Every business owner should think of workers’ compensation insurance as essential to their operations. It safeguards not only the employees on whom you rely on and who are important to you, but also the hard work that you have put into building your business. But, as with any other insurance policy, there are limits to its coverage. And both employers and employees should be aware of the things that the policy does and doesn’t cover.
EZ is here to assist you with any questions you may have regarding workers’ comp coverage for your business. We will set you up with your own dedicated agent. Who will provide you with instant free quotes, answers to all your questions, and help choosing and signing up for policies, all free of charge. You already have a lot on your plate, so let us handle your insurance needs. To start, simply enter your zip code in the bar located below. Or you can call 877-670-3538 to speak with an agent right now.
If you’re a small business owner, there are probably a lot of things that worry you. One of them might be the amount of liability insurance you should have. Since facing a major lawsuit could mean losing everything you’ve worked for. This, of course, is the worst-case scenario. Since the likelihood of being hit with a lawsuit that your current insurance policy won’t cover is fairly low. But, even so, it’s better safe than sorry – and this situation is entirely avoidable with an umbrella liability policy.
Umbrella insurance is a supplemental form of liability insurance that kicks in when you exhaust your primary policy’s liability limits. In the following, we’ll examine the specifics of this type of liability insurance. Including what it is, who needs it, how much it costs, and what it doesn’t cover.
How Does an Umbrella Liability Policy Work?
If you choose to purchase an umbrella liability policy for your business, you will actually be getting two different types of coverage: liability and defense. Even though you might already have a general and/or professional liability policy for your company. Umbrella policies provide additional coverage that extends beyond the boundaries of your primary insurance.
So, if your business faces a lawsuit and you are liable for damages that are greater than the limits of your commercial insurance policy, an umbrella policy will help you to pay the remaining amount. That means you won’t have to sell any of your assets. Or use any of your savings to pay the additional expenses out-of-pocket.
It’s important to note that since umbrella policies are supplemental coverage. You can’t purchase one of these policies without first having primary liability insurance.
What Does an Umbrella Liability Policy Cover?
Commercial umbrella liability policies work pretty much the same as traditional commercial liability policies. It also provides protection against the same types of risks. To be more specific, an umbrella insurance policy will give you supplemental coverage for the following:
Slip and fall injuries – If you have general liability insurance and also purchase commercial umbrella insurance. Your supplemental policy will cover any excess legal costs in the event that a third party sustains an injury on your company’s property.
Third party property damage – The addition of commercial umbrella insurance to a general liability policy will help to pay legal fees associated with the destruction or damage of third-party properties.
Car accidents – If you have a commercial auto insurance policy or a policy that covers hired and non-owned vehicles. Adding commercial umbrella insurance to those policies can help cover costs in the event that someone sues you for damages caused by one of your vehicles.
Employee injury lawsuits – Having an umbrella policy on top of employers liability insurance (which is typically included in workers’ compensation insurance) will help pay for employee lawsuits brought on by work-related injuries caused by employer negligence.
What Isn’t Covered?
Although umbrella insurance can increase the liability limits of several other policies. It does not offer the complete safety net that a small business may require.
Umbrella policies do not cover the following:
Damages within the primary policy’s limits – Umbrella liability insurance does not kick in until the limits of the primary policy have been exhausted. As with any insurance, it only covers things up to the policy’s maximum.
Business property damage – Damage to your company’s property due to things like fire, theft, or certain types of weather can be covered by the commercial property insurance included in a business owner’s policy (BOP) or commercial package policy (CPP). Umbrella policies are extensions of existing liability insurance and you cannot buy them separately for property.
Professional errors – Malpractice insurance, also known as errors and omissions insurance (E&O) or professional liability insurance, protects professionals from legal action stemming from their own negligence or those of their clients. Excess liability insurance, also known as excess E&O insurance, is very similar to umbrella insurance. You can use it to increase the limits of this type of policy. But umbrella liability insurance will not cover this type of negligence.
Employee theft – If you want to protect your company financially from employee theft or fraud against customers or clients. You’ll need commercial crime insurance, also known as a fidelity bond.
Who Needs an Umbrella Liability Policy?
In general, the more face-to-face interaction your business has with your clients and customers, the greater your liability risks. In addition, if your employees are using dangerous equipment or heavy machinery, your business faces even more risks.
If the above is true for you, and you believe that the cost of a claim could exceed your liability limits, purchasing commercial umbrella insurance is something you should seriously consider doing. This coverage may be of useful for your business if:
You’re a general contractor and your client needs more coverage – Umbrella insurance is a stopgap measure for contracts worth more than $2 million. If you’re a general contractor, and your existing general liability policy has a $2 million per-occurrence limit, but your client contract requires a $5 million per-occurrence limit. You would add an umbrella policy with a $3 million per-occurrence limit.
You’re in contact with the public – The possibility of a customer sustaining a physical injury is increased when your establishment is open to the public. For instance, during business hours, wholesalers frequently use various pieces of machinery to restock the shelves of their warehouses. When using this kind of machinery in the presence of customers, there is a risk of injury. If someone gets hurt while on your property, you could be liable for expensive medical bills and lawsuits that exceed the limits of your general liability insurance.
You do work off site – Working away from the physical location of your company can also increase the liability risk it faces. For instance, if your employees are performing work at the residence of one of your customers, there is an increased possibility of property damage.
The Cost of Umbrella Liability Policies
The range of umbrella insurance policies available is very broad, with a significant gap between the lowest and highest limits of coverage. This makes sense, since no two businesses share the same set of risks. There are businesses that choose to purchase $1 million in supplemental coverage, and businesses that might even choose to purchase $100 million or more in coverage. The amount of coverage you choose, as well as other factors related to the type of business you run, the amount of employees you have, and your annual revenue, will determine how much an umbrella policy will cost you.
With that being said, prices can vary widely even between seemingly identical businesses. And keep in mind that without knowing your business, we can’t give you exact quotes, so speak to an EZ agent to find out what you can expect to pay. But to give an example, let’s say your small business is looking for $1 million in coverage. With a $1 million policy, the highest premium costs average around $208 a month, or $2,500 for the year. Generally businesses with higher risks pay the most in premiums; this typically includes doctors, lawyers, and construction companies. On the opposite end of the spectrum, for less risky businesses such as cleaning services, you would pay around $33 a month. Or $400 for the year.
How Much Coverage Do I Need?
If you have a business that is contracted out by clients, and you have a contract with a client that requires a liability limit higher than $2 million, you will typically purchase an umbrella policy to meet that limit. It’s not unusual to see contracts worth $5 million or more. In that case, you buy a $3 million umbrella policy in addition to a $2 million primary policy. Otherwise, the amount of coverage you choose should be tailored to the specifics of your business and its industry.
Keep these three things in mind as you browse umbrella insurance quotes:
Your coverage should match your assets – To have enough coverage, your coverage needs to match your assets. So, if your entire company’s net worth is $1 million, that’s how much coverage you need.
Umbrella liability starts at a minimum of $1 million – You cannot purchase an umbrella liability policy with a coverage limit of less than this amount.
Umbrella liability coverage comes in increments of $1 million – You can only increase your liability coverage in increments of $1 million, allowing you to acquire precisely the amount of protection you need.
The Difference Between Umbrella Liability and Excess Liability
There is a common misunderstanding that commercial umbrella insurance and excess liability insurance are the same thing. You can purchase excess liability insurance to supplement either – and only – your existing general liability insurance or errors and omissions insurance (E&O) policy. Your supplemental plan will only provide extra coverage to the specific plan you purchase it for. For example, if you buy excess liability for your general liability policy. It will only provide extra coverage for your general liability claims. But if you purchase an umbrella policy, you will have extra coverage for all of your other liability policies in one supplemental policy.
Working With EZ
Get in touch with an EZ agent if you want to compare commercial insurance policies and prices quickly and easily. If you need assistance making sure your business has enough coverage our agents are available to assist you at no cost. We’ll take a look at your long-term financial plans and insurance requirements, then recommend the best policies for you. Enter your zip code in the box below to get a free instant quote. Or give us a call at 877-670-3538 to speak with a live agent.
One of the most important things you can do as a small business owner is make sure you have enough insurance coverage in case of a claim or lawsuit against you. Liability policies will go a long way in protecting you, but do you know if there are gaps in your current commercial insurance policy? There might be, so it’s crucial to know whether you might need excess insurance to supplement your primary insurance policies.
Primary Insurance
Primary insurance first responds to a claim, but it might not cover the full amount of the claim.
A primary insurance policy is the first policy to respond to a loss or claim made against your business. Professional liability insurance and general liability insurance policies are considered primary insurance, and are great ways to protect your business against losses. But these primary plans might not cover the full amount of a claim if the claim amount exceeds the policy’s limits.
For example, if a customer comes into your store and is injured slipping on a spill that was not cleaned up and had no warning sign, they can sue you for the cost of their medical bills. If you are found responsible for the claim against you, your general liability insurance will pay up to your policy’s limit – for example, $1,000,0000. But if the settlement is $1,400,000, what happens? You would have to pay the rest out-of-pocket, which could cost you your business.
Excess Insurance
In order to avoid the above situation, you can choose to purchase excess insurance. When your primary policy cannot pay a claim in full because it exceeds the limits of your policy, your excess insurance kicks in. The primary purpose of excess insurance is to close gaps in coverage and offer another layer of protection. To get back to the example from earlier, if you had excess liability insurance in that case, the $400,000 you would’ve had to pay out of pocket would now be covered. Umbrella insurance is a common type of excess insurance policy.
Stacking
In certain states, you can stack your primary and excess insurance policies together. What this means is that you can add them together to create a higher total amount of coverage. For example, if your primary policy has $800,000 worth of coverage and your excess policy’s limit is $1,000,000, then your total available amount for a claim would be $1,800,000. If you cannot stack policies, you would first have to exhaust your base policy of $800,000, and then the total available coverage of your $1,000,000 excess policy would be $200,000.
Some states will allow you to stack policies so you get more coverage for a claim.
The states that allow stacking are:
Alabama
Colorado
Florida
Georgia
Kentucky
Mississippi
Missouri
Nevada
New Jersey
North Carolina
Oklahoma
Oregon
Pennsylvania
Rhode Island
South Carolina
Texas
West Virginia
Need Help?
Do you have a primary policy and/or an excess policy? Do you need help finding policies that will completely protect your business? If you need a new plan or just more coverage, EZ.Insure can help. We will go over your business’s needs and make sure that it is fully protected in any eventuality. Our agents work with the top-rated insurance companies in the country and can compare quotes in minutes to find a comprehensive plan while still saving you money. To get free instant quotes on small business insurance plans in your area, enter your zip code in the bar above, or to speak to one of our licensed agents, call 888-615-4893.
There are thousands of businesses out there making websites, all trying to create unique designs, logos, videos, text, and images. There is a danger that, when you create a website for your business, your design or logo might resemble that of another business. This could be totally coincidental, but it could still be a serious problem that ends in a copyright infringement claim. How will this affect your business? What steps should you take to protect yourself?
Copyright Laws
Copyright infringement happens when you recreate and display copyrighted work without the permission of the copyright holder.
You want people to notice your website, but what happens if another company notices that your website is similar to theirs? If your logo or design is similar to that of another company, you could face a legal copyright claim from that company.
Copyright infringement means that a copyrighted work has been recreated and displayed without the permission of the copyright holder. Copyright laws protect creative and intellectual property against anyone copying or stealing the design. Intellectual property that is protected will include the words “all rights reserved” or “copyright.” The laws surrounding intellectual property protect:
The automatic right to your creative work from the moment of its creation.
The exclusive rights to use, copy, or modify your original content.
Any intellectual property without the need for the author, artist, or developer to publish or register their work.
Avoiding Copyright Infringement
If you decide to create your own web design, or hire a web designer to do it for you, you need to familiarize yourself with the laws in order to avoid copyright infringement. Copying a website, whether intentionally or not, will come with consequences. Here is what you can and cannot do:
You cannot duplicate copyrighted designs such as images, text, or source code.
It is illegal to use someone else’s logo or trademarked material.
You are allowed to use inspiration from different sites and incorporate them into your web design (as long as it is not the same exact material).
It is legal to recreate designs similar to those on another site using custom code.
If you use a website template, there will be thousands of other sites similar to yours and you have no rights to the source code.
A custom website gives you ownership of your unique design, and another site cannot legally copy it.
If the owner of the copyright can show proof of infringement, you will have to pay a penalty for each infringement. This is not the only consequence to copyright infringement: you will also have to pay attorney fees and will suffer damage to your business’ reputation.
Accidents happen, and that could include accidentally copying another person’s design or image. Companies are constantly changing their logos or website designs in order to keep up with what is popular, and you could end up using a similar design or image. Protect yourself with a business owners policy that includes general liability insurance, which will cover your business property and intellectual property. You should also consider a professional liability insurance policy, or errors and omission (E&O) insurance. This will protect you from copyright infringement, covering:
Court costs
Legal fees
Damages
Alleged or actual negligence
Personal injury costs
Creating a website is vital for your business, but it can be difficult to create a design that does not seem similar to that of the thousands of other sites on the internet. The best thing you can do is protect your business and its reputation with the right commercial insurance policy. EZ.Insure understands just how important it is to protect your business from claims, as well as your designs from copyright infringement. We work with the top-rated insurance companies in the country in order to compare quotes and find the best plan for your business. To get free instant quotes, simply enter your zip code in the bar above, or to speak to one of our trained, licensed agents, call 888-615-4893.
Even if you suspect the workers’ compensation claim is false. You have to file it when the employee comes to you with it. You can be penalized if you fail to report a work-related injury with a full report of all related details as soon as possible. The insurance claim adjuster’s job is to determine whether or not the claim is valid or not. You are paying premiums to your insurance company so that they can handle these matters. If your report is thorough and you work closely with your adjuster, there is a good chance the adjuster will catch the fraudulent claim and deny it anyway. So, delaying or not filing a report because you think it’s invalid could backfire on you, best to just let the adjuster do their job. 
Dispute The Claim
