Indiana requires employers to carry workers' compensation coverage, with narrow exceptions. It pays the medical costs and part of the lost wages of an employee injured on the job, and in exchange it is generally the exclusive remedy, which protects the business as much as the employee.
Going without it is not a cost saving. The Indiana Worker's Compensation Board can assess penalties against an uninsured employer, and an uninsured claim comes straight out of the business.
What the policy pays
- Medical treatment: care for a work-related injury or illness, with no deductible to the employee.
- Wage replacement: a portion of lost income while an injured employee cannot work.
- Permanent impairment: benefits for lasting injury.
- Death benefits: payments to dependents after a fatal workplace accident.
- Employers' liability: defense and damages for injury suits that fall outside the workers' compensation system.
How premium is calculated
Workers' compensation premium is driven by your payroll, the class codes assigned to the work your employees actually do, and your experience modification factor. Misclassified payroll is the single most common reason a business overpays. An employee doing office work should not be rated as field labor.
We review class codes at quoting time and again at audit, because the audit is where a misclassification turns into a bill.
Getting the audit right
Your policy starts on estimated payroll and is trued up at the end of the term. Clean records on payroll by class code, overtime and subcontractor certificates of insurance keep that audit from producing a surprise. Uninsured subcontractors typically get added to your payroll at audit, so collecting their certificates during the year is worth the effort.