A Guide to Workers' Compensation for a Non-Profit Organization
In the United States, there are 1.8 million non-profit organizations that collectively help employ the country's workforce. Are you a non-profit organization looking for more information on Workers' Compensation?
Not sure about Workers' Compensation for a non-profit organization? We understand that navigating the laws surrounding Workers’ Comp can be difficult for a non-profit business.
Our guide can help walk you through understanding what Workers' Compensation coverage is. We'll also cover exemptions available to non-profits, and much more.
Find out what you might want to know about Workers’ Compensation insurance. Let's go!
What Is Workers' Compensation?
Workers' Compensation is a type of insurance. It can provide wages and medical benefits to employees after an injury or becoming ill as a result of their job. This can protect both employers and employees in the event of an injury or illness that affects an employee's ability to work.
In most states, employers are required by law to have Workers' Compensation insurance. This coverage helps to ensure that employees who are injured or become ill on the job can be taken care of financially and medically.
To summarize, this is what Workers' Compensation can cover.
- Immediate medical costs
- Ongoing medical costs
- Partial lost wages
How Workers’ Comp Helps to Protect Your Business
A Workers' Comp policy can provide financial protection for business owners if an employee encounters an injury. For instance, if shelves fall on a worker while they are conducting their job, they might become injured.
Having Workers’ Compensation can help cover expenses such as medical bills, lost wages, and other associated costs. Without proper insurance, your business may face high fees related to the injury and would have to pay out-of-pocket to cover the expenses for the accident.
Do I Need Workers' Compensation for a Non-Profit Organization?
In most cases, yes. Non-profit organizations are usually subject to the same Workers' Compensation laws as for-profit corporations in a given state. This means that, unless you qualify for an exemption, you might need to provide Workers' Comp insurance coverage for your employees.
If you have a non-profit organization, it can be essential to understand the laws around Workers' Compensation coverage. It can be your responsibility to help make sure you are compliant.
Even if your organization qualifies for a Workers’ Comp exemption, it can still be important to speak to an insurance representative before making a decision. This can help ensure that both you and your employees can be protected in case of accidents on the job.
What Are Exemptions for Workers’ Compensation?
There are several exemptions available for non-profit organizations under Workers' Comp laws. These include volunteer service, religious organizations, and seasonal employees. Exemptions vary by state.
Volunteers not paid for their services may be exempt from Workers' Compensation coverage requirements. Make sure you speak to an insurance representative to find out if your volunteer staff needs coverage.
Religious organizations that operate for non-profit purposes may be exempt from Workers’ Comp coverage. However, this only applies to some states.
Some states may allow employers to exclude seasonal or temporary employees from Workers' Compensation coverage. This could include whether they work for a limited time or are not considered permanent staff.
Best Practices for Non-Profits When It Comes to Workers' Comp Insurance
It can be important to make sure your organization is properly covered. Here are a few best practices you should follow.
Understand Your Local Laws
Be sure to understand the Workers' Compensation laws in your state and city. Make sure you know of applicable exemptions and what type of coverage is mandatory. This differs state by state.
Review Your Coverage Regularly
You should review your Workers' Comp policy every year to make sure it can still meet the needs of your organization. This can also allow you to take advantage of changes to state or city laws that could impact your coverage requirements.
Train Staff on Safety Practices
Employee safety should be a priority. Make sure that staff members are aware of the safety protocols your organization has in place and understand how to correctly use tools or equipment they may come into contact with.
Provide Clear Job Descriptions
Employees should know their duties and responsibilities. Help make sure the job descriptions clearly outline the tasks that each employee is responsible for, so they know what to expect from their job. This can help them understand how to properly perform their duties and help reduce the risk of an accident occurring.
Document Any Accidents or Injuries
In the event of an accident, make sure you document relevant information promptly, including the date, time, and details of the incident. This can help your insurance provider process claims quickly and accurately.
Work with an Experienced Insurance Provider
Help ensure you are working with a reputable insurance provider who understands your organization's needs. They should be able to guide you in selecting which coverage options can best meet your organization's budget and needs. They can make sure that you have the proper coverage for your situation.
Obtaining Workers' Comp Insurance for Non-Profits
Finding Workers' Comp insurance for non-profits doesn't have to be hard. An experienced insurance provider can help you find coverage for your organization at a reasonable price.
They should understand the specific needs of your non-profit organization and tailor a policy to meet those needs. Working with an insurance provider is one of the best ways to make sure your non-profit organization can be adequately covered while staying within budget.
How Workers’ Comp Costs Are Calculated for Non-Profits
Your Workers' Compensation pay rate is based on every $100 of your payroll among other factors. This rate is determined by your employees' job categories, your claims history, and your payroll. The resulting premium is specific to your business.
This is the formula:
Classification Rate x Experience Modification Rate x (Payroll / 100) = Premium.
What Affects Workers’ Comp Cost
The cost of your premium can vary based on several factors. We've listed some of these factors below.
- Services offered
- Business equipment and property used to operate the business
- How much revenue the business has generated
- Location of the business
- Number of employees the business has
This information can help the insurance provider better understand how they can provide the most comprehensive coverage for your business at a reasonable rate.
Monopolistic State Funds
Some states require non-profits to buy Workers' Compensation insurance from a monopolistic state fund. These states include North Dakota, Ohio, Washington, and Wyoming.
Other Important Policies for Non-Profits
Workers' Compensation insurance helps to protect your employees and can provide some protection for your business. However, it doesn't cover property damage or injuries to visitors. It's recommended that non-profit businesses also consider other insurance policies to help cover those risks.
General Liability Insurance
This can cover costs associated with injuries and property damage to clients. For instance, if a client were to trip and become injured at your business, this policy could help cover their medical expenses.
Business Owners Policy
Business Owners Policy is also referred to as BOP. This package combines commercial property insurance and general liability insurance, and it usually is less time consuming to obtain, compared to buying each coverage individually.
Business Property Insurance
Business property coverage can help provide financial security against physical damage to business items. It can also cover theft, or destruction of the organization’s assets.
This type of coverage can help cover costs associated with replacing or repairing damaged property and equipment.
Looking for Insurance?
This article has provided a lot of information on Workers' Compensation for a non-profit organization. For most non-profits, you may want to consider obtaining coverage. There are a few exemptions, but it's best to speak with an insurance representative to find out if it applies to your business or not.
Have any questions about which type of insurance is right for your business? Need help getting started with the process? Then contact our team at PolicySweet® today to get an instant quote. We look forward to helping you protect your organization!