Maryland Workers’ Compensation Insurance: Providers, Rules & More

Workers’ compensation laws in Maryland requires any employer with one or more employee maintains a workers’ compensation policy to pay costs associated with employees getting hurt performing job duties. Maryland is a competitive state where the state fund, Chesapeake Employers’ Insurance Company competes with private carriers.

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Maryland Workers’ Compensation Insurance Top Providers

Different workers’ compensation insurance carriers serve different types of businesses in different industries better than others. Shop insurance rates with carriers that are financially strong. Some regional carriers are better suited for local risks compared to large national brands. If you are a Maryland small business, here are the top providers where you can get a quick quote.

Maryland Workers’ Compensation Insurance Carriers

Here are five of Maryland’s top providers of workers’ compensation insurance.

The Hartford

The Hartford has remained one of the top small business insurance providers for years in part because it treats every claim with personalized attention. The Hartford has six additional coverages included in its workers’ compensation policy for free including these additional coverages include: stop gap, voluntary compensation, extended filing, and paying for reasonable expenses like paying for a claim-related deposition.

The Hartford is a perfect workers’ compensation carrier for small businesses in low-risk class codes, generally considered Main Street companies like offices or retail locations. Small business owners like the convenience of getting all small business insurance needs met with The Hartford. Bundles include all liability coverage, building and property, and professional liability insurance policies.

Chesapeake Employers’ Insurance Company

The Maryland Injured Workers’ Insurance Fund is now called the Chesapeake Employers’ Insurance Company. This is the largest underwriting for Maryland workers’ compensation insurance guaranteeing insurability for the toughest risk classifications or companies with a high-loss history.

Chesapeake Employers’ Insurance Company is the best option for small businesses who have trouble finding workers’ compensation coverage or reasonable rates with private insurers. Whether this is due to a high claims history or hazardous risk classifications, Chesapeake guarantees Maryland companies insurance.

Erie Insurance

Erie Insurance is a regional insurance carrier that has been serving Maryland businesses for nearly a century. This carrier has both personal and business lines of insurance with local agents. It is currently one of the top 10 providers in Maryland for workers’ compensation based on total insurance premiums under management bringing a lot of experience to the table.

Erie Insurance is a great fit for a small local business that wants a partner in the community as they grow. With local agents and a company mission of serving the community, Erie Insurance agents truly become part of the team for the small mom-and-pop shop that wants actionable guidance to meet larger goals and objectives.

Travelers Group

Travelers Group is the largest workers’ compensation insurance providers in the nation and largest provider in Maryland. This carrier can provide coverage across state lines for small business’ serving states in proximity to Maryland. Travelers Group has a custom ConciergeCLAIM service for workers’ compensation injuries designed to streamline the process of getting everyone back to work quickly.

Travelers Group covers just about every risk class for most lines of insurance. It fits best with small businesses providing services to the medical and health care industries. Employees often face specific job-related risks and Travelers Group has a strong synergy with its own healthcare network and injury providers.

Selective Insurance

Selective Insurance is a large regional commercial and personal insurance carrier. It is one of the top workers’ compensation insurance carriers in Maryland. This carrier has a long history with more than 80 years of exceptional service to its clients in all lines of insurance.

Selective Insurance covers many different industries but is a good choice for community-based organizations and companies finding competitive rates for professions with diverse groups of patrons. Good business fits for Selective Insurance include education organizations, care facilities, and recreation businesses like golf courses.

What Workers’ Compensation Insurance Covers

Workers’ compensation insurance covers an employer for the costs associated with employees who get hurt or sick on the job. Costs associated with medical services, prescription drugs, rehabilitation services, and occupational therapy are paid. Up to 66% of the employee’s average weekly wage (AWW) is also paid until the person can return to work.

Some injured employees will never return to full physical capacity are designated as having met maximum medical improvement (MMI). If an employee is designated with MMI, long-term disability payments, new job assignment, or vocational training are explored to close the case.

Many workers’ compensation insurance policies have liability limits of $1 million per incident with a $2 million aggregate. A business such as a contracting company has a high probability of more than one incident per year. In these cases, the aggregate limit covers those additional claims but is capped for the annual maximum.

Maryland Workers’ Compensation Insurance Costs

In general, the cost of workers’ compensation is based on a business’s payroll expenses and their employees’ workers’ risk classification. An experience rating is also used and is based on how long an employer has been in business and its claim history. In Maryland, small businesses can expect to pay between 24 cents and $2.31 for every $100 of payroll.

The formula for determining workers’ compensation insurance rates is:

Premium = Classification code cate x Experience modification rating x Payroll per $100

Maryland Workers’ Compensation Example

Let’s look at an air conditioning installation company in Baltimore with the owner, one receptionist, and two technicians. The owner can opt out of coverage for himself. The receptionist might have a class code rating of 24 cents while the technicians have a more dangerous job leading to a class code of $4.94. If the receptionist’s payroll is $35,000 annually and the two technicians’ payroll totals $90,000, the potential premium is $4,530.

Keep in mind that rates do vary per insurance company, although you may get a bundling discount with other business policies such as a business owner’s policy (BOP). On top of the class code estimates, rates are based on experience ratings as well as carriers’ desire to provider workers’ compensation insurance for certain industries.

Example of Maryland Workers’ Compensation Rate Variations

Maryland has many options when it comes to workers’ compensation. If you are shopping for the best rate, you may want to seek the help of a commercial insurance broker. Insurance321 is a great option because of their streamlined application process complete in minutes to get quotes from the top workers’ compensation carriers out there.

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Maryland Workers’ Compensation Audit Requirements

Workers’ compensation insurance premiums are defined by payroll, classification codes and experience modifiers. A policy audit is conducted by insurance carriers approximately two months before the policy is set to renew. This is to confirm the actual payroll during the policy’s term and determine rates for the next policy period.

Audits are confusing and frustrating for business owners who don’t understand the process or the purpose. Insurance companies must estimate premiums based on expected payroll costs, but these costs vary based on a number of employment conditions. Because the risks aren’t vetted fully until after the fact, policy audits are conducted to make sure the right premium was paid. Any excess payments uncovered during the audit are returned to the business while underpayments are billed retroactively.

Maryland Workers’ Compensation Insurance Laws

Maryland workers’ compensation laws require, with few exceptions, that every employer with at least one employee maintains workers’ compensation insurance covering employees. Certain self-employed individuals with no employees are exempt, while large corporations with assets of $10 million or more and able to self-insure.

Maryland employers failing to maintain workers’ compensation insurance are subject to:

• Fines up to $10,000
• Personal liability of officers and directors
• Costs of medical coverage and wages for the injured employee

Any injury, illness, or disability to an employee as a result of work-related tasks must be reported to the Workers’ Compensation Commission within 10 days. The form is called an Employer’s First Report of Injury and must be filed regardless of whether or not the employee’s notice is written or oral.

Maryland Workers’ Compensation Insurance Exemptions

Maryland law requires workers’ compensation insurance to be maintained for all employers, with few exceptions, maintain workers’ compensation insurance policies. Most companies are not eligible for exemptions. Failure to adhere to Maryland workers’ compensation laws can result in fines not exceeding $10,000.

The exemptions for Maryland workers’ compensation insurance include:

• Large employers with a net worth equal to or exceeding $10 million who approved for self-insuring
• Independent contractors and self-employed individuals other than migrant workers.
• Agricultural office workers
• Tractor-trailer owner-operators

These are general guidelines regarding exemptions. If you feel you are eligible for a workers’ compensation exemption, confirm this with the Maryland Division of Workers’ Compensation.

Maryland State Fund: Chesapeake Employers’ Insurance Company

The Chesapeake Employers’ Insurance Company is the new name for the Injured Workers’ Insurance Fund, which was established in 1914 when the state passed the Workers’ Compensation Act. It is the largest provider of workers’ compensation insurance, even though it competes with private carriers within the state. This carrier has also uncovered some of the biggest workers’ comp fraud cases in the state.

The Chesapeake Employers’ Insurance Company provides fully integrated services combining insurance and safety consultation. Employers get customized health and safety programs designed to reduce injuries. These additional business benefits are what makes Chesapeake so competitive among Maryland workers’ compensation insurers.

Maryland Workers’ Compensation Regulations

The Maryland Department of Labor, Licensing and Regulations has enacted some rules employer need to follow to ensure workers are aware of their rights and responsibilities, that any incidents are well documented, and to make sure employers don’t discriminate against injured or ill workers.

Some Maryland workers’ compensation requirements for employers include:

• Post the Workers’ Compensation in Maryland notification poster in a frequented area for employees to see
• Include the employer’s name, business address and employer identification number on the notice
• State their insurer’s name, contact information, and policy number on the notice
• Maintain records of all work-related illnesses and injuries that require medical treatment beyond first aid or result in a loss of consciousness, restriction of motion, or transfer of job with new physical duties
• Keep incident records for any work-related injuries or incidents that could lead to an injury claim

Maryland employers are not allowed to discriminate against employees who file workers’ compensation insurance claims. Termination resulting directly from filing a workers’ comp claim is prohibited and subject to penalty and civil action. However, employees can be terminated as long as it is not solely based on the claim, meaning there need to be other reasons for terminating an employee.

Maryland Workers’ Compensation Insurance Deadlines

Maryland law states that employers must have viable workers’ compensation insurance the moment they hire an employee. Should a complaint be filed, a penalty of $250 per day is assessed to the employer. Penalties go up to $500 per day, and a business can be closed if it fails to comply.

Some Maryland workers’ compensation insurance claims deadlines include:

• Employee’s report of injury: Notify employer immediately, and then complete this form within 10 days, filing it with the Maryland Workers’ Compensation Commission within 30 days
• Employer’s First report of injury: Complete this form within 10 days, filing it with the insurance company
• Insurance carrier approval: Obtain approval or denial from the insurance company within 21 days; the determination must be in writing stating that the benefit amount or explaining why the claim is denied
• Statute of limitations: Monitor noted incidents that could result in claims that meet the two-year statute of limitations for workers’ compensation claims

What Maryland Workers’ Compensation Insurance Covers

Maryland workers’ compensation insurance covers all costs associated with an employee getting hurt on the job. The insurance company assigns the risk based on paid premium, and thus manages the claim, and pays the benefits. Workers’ compensation policies typically include multiple types of coverage.

Key coverage components of workers’ compensation insurance policies include:

• Medical expenses: Emergency response and medical costs associated with the work injury continuing through surgery or other treatment
• Rehabilitation expenses: Physical therapy costs are paid to help the injured regain full or maximum physical capacity after the injury
• Vocational benefits: Vocational school are paid for up to 24 months to learn a new skill if unable to return to the same job due to the injury
• Long-term disability: Long-term disability income payments for permanent injury and scarring preventing a full return to work
• Beneficiary expenses: Burial expenses for a deceased worker who passed away resulting from work-related injury or illness
• Wages: Salary payments up to two-thirds of average weekly wages to injured employee contingent on employment history through short-term disability payments
• Employer liability: Claims administration defense costs to fight fraudulent workers’ compensation insurance claims

Employers should not expect workers’ compensation insurance to pay for the cost of any business interruption resulting from the injury or an accident that led to the injury. Having complete business general liability, business property, and equipment breakdown coverage are the business insurance solutions protecting additional financial exposure.

What Maryland Workers’ Compensation Insurance Doesn’t Cover

Maryland is very specific in the language of its workers’ compensation insurance law. The law states that injury was caused by “an accidental personal injury arising out of and in the course of employment.” This means that being “on the job” and getting hurt doesn’t result automatically in an approved workers’ compensation claim.

Additionally, workers’ compensation will not cover injuries resulting from intentional harm or while breaking the law. An employee willfully disregarding safety protocol or horsing around and injured in the process may not be eligible for workers’ compensation insurance benefits.

How to File a Workers’ Compensation Claim

When an employee gets hurt, the employer must make sure the claim is filed properly in a timely manner. It is important that both employers and employees follow claim protocol to make sure all rights are reserved by the employee, the company, and in the insurance carrier. The entire process starts with an employee incident report to the employer regarding an accident.

The three claim timelines to follow when filing a Maryland workers’ compensation claim are:

1. Employee seeks medical attention and notifies the employer of the incident causing injury within three days.
2. Employer calls insurance company within 10 days to file a claim and files the First Report of Injury with the State of Maryland Workers’ Compensation Commission.
3. The injured employee has 60 days to report a claim to the Workers’ Compensation Commission if an employer has failed to file the claim.

These timelines are subject to change based on state law. A fatal injury or permanent disability resulting after the fact has a two-year statute of limitations to file workers’ compensation insurance claim.

Tips on Getting Maryland Workers’ Compensation Insurance

Here are some tips on getting Maryland workers’ compensation insurance.

Establish Written Safety Protocols & Procedures

If a workers’ compensation carrier doesn’t demand a safety policy, it can offer a discount for implementing one. Write safety procedures down in an employee manual. Post risks and safety rules in pertinent areas of operations. Regularly train employees on what to do if something goes wrong. All of these steps reduce claims and ultimately your workers’ compensation premiums.

Classify Employees Properly

Don’t assume all insurance companies rate employees in the same fashion. Workers’ compensation doesn’t rate the overall business but the actual primary job each employee performs. This means clerks, sales representatives, installation experts, and drivers all have their own class code. Proper classification can save thousands in annual premium.

Talk to Other Employers in the Area

Talk to small business owners in the area ― especially if they are in a similar industry as yours. Discuss their experience with their workers’ compensation carrier. This will give you a better idea of how various carriers handle claims and provide service to their clients. You pay a lot for workers’ compensation insurance protection and should feel confident your provider will cover you if a claim is ever filed.

Maryland Workers’ Compensation Frequently Asked Questions (FAQs)

We understand that workers’ compensation insurance is complicated. If you need more answers, please visit our forum or leave a comment. Making sure Maryland business owners have the right answers for all their workers’ compensation insurance needs is our top priority.

How Much Does Workers’ Comp Pay In Maryland?

An employee can collect up to two-thirds of the AWW to a maximum of $1,116 with a minimum payment of $50. This is based on the total aggregate time an employee has worked for a company in the previous 12 month period.

How Is the Average Weekly Wage Calculated?

Workers’ compensation insurance companies calculate the weekly benefit based on what is referred to as the AWW. Average weekly wage is calculated one of three ways. Employee month wages can be multiplied by 12 and divided 52, a daily rate can be multiplied by five, or an hourly pay rate can be multiplied by the number of hours worked in a week.

Are There Penalties for Not Having Workers’ Compensation Insurance?

Maryland law requires business owners to maintain workers’ compensation insurance. Failure to do so can result in penalties up to $10,000 plus any claim cost that’s the responsibility of the company or its officers. Additionally, failure to file forms in a timely fashion reporting workers’ compensation claim injuries is considered a misdemeanor offense.

The Bottom Line

Even though workers’ compensation insurance is required by Maryland law, it is a valuable component to building working teams that know employers care about their safety and welfare. Going the extra step to work with insurance providers to train and educate employees on safe work practices reduces claims and improves the work environment for all.

We recommend The Hartford as a small business insurance business partner. It exceeds expectations of small business owners with policies that provide the right amount of coverage for the right price. You can complete its online application in minutes to get a free, no-obligation workers’ compensation insurance quote.

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