As an employer, you are required to provide worker's compensation insurance for your employees. If you haven't bought this type of coverage before, you may have a lot of questions. Here's an overview of what you need to know.

1. You Buy Worker's Compensation From Private Carriers

When it's time to buy worker's compensation, you need to contact a commercial insurance agent. WorkSafe or the equivalent organization in your state or territory does not provide worker's compensation insurance. Rather, these organisations just oversee the coverage and spell out what benefits the policies in each area need to provide.

2. Comparison Shopping Can Help You Find Lower Prices

Because this is a commercially available product, you may find a number of different prices from various companies. To find the lowest price, it helps to do some comparison shopping. Of course, there are other ways to lower costs as well. For example, you may be able to choose a higher excess or see if signing up your employees for certain safety training classes helps lower premiums.

3. Worker's Compensation Doesn't Just Cover Wages

If you are unfamiliar with this type of coverage, you may think that it just covers wages. However, it can actually cover a lot more than that. Generally, these policies also cover medical bills that your employees accrue and potential costs of rehabilitation or even job retraining. If your employee dies on the job, the policy can also provide a death benefit to their surviving relatives.  

4. Freelancers Don't Need Worker's Compensation Insurance

You only have to provide worker's compensation insurance to people who are classed as your employees. If you hire consultants or freelancers, they are not considered your employees. Those workers are considered to be self-employed.

As a result, they don't get to be on your policy. That saves you money. If you want to help out any freelancers that you work with, you may want to let them know that they can get their own wage replacement insurance policies.

5. Worker's Compensation Fraud Is Very Rare

Are you worried that some workers may make a fraudulent claim on your worker's insurance policy and needlessly drive up the prices? Well, the good news is that there is no reason to be worried. The risk of fraud is very low. In fact, according to some reports, only 1% of worker's comp claims are fraudulent.

To learn more about worker's compensation, contact a commercial insurance agent today.