Workers’ compensation insurance pays for employees’ medical expenses and lost income when they experience a work-related injury or occupational illness. Most states require workers’ comp by law. New Jersey requires all employers with one or more employees to carry workers’ compensation, and they typically pay between 72 cents to $19.72 per $100 of payroll.
New Jersey Workers’ Compensation Insurance Providers
New Jersey employers can obtained coverage from more than 400 private licensed workers’ compensation insurance companies authorized to sell workers’ comp policies in the state. Certain businesses may also be approved to self-insure. Difficult-to-insure businesses or businesses having trouble finding coverage can utilize New Jersey’s assigned risk pool, which places these businesses with a carrier.
Top Providers for Workers’ Compensation Insurance in New Jersey
Employers who want broad, affordable workers’ comp coverage
Small businesses who want a regional carrier focused on service
New ventures and startups looking for their first workers’ comp policies
Cash-strapped employers who want pay-as-you-go workers’ comp integrated into payroll service
Business owners who want to lower future premiums with work safety programs
The Hartford has a team dedicated to small businesses, and the carrier has developed affordable products accounting for the unique risks small businesses face. They can also provide workers’ comp quotes in most industries they serve. The Hartford’s basic workers’ comp policy is a smart choice for New Jersey employers who want broad, affordable coverage.
A basic policy with the insurer includes six unique features, like coverage for reasonable expenses you incur in your defense and coverage for employees and volunteers even when not required by state law. New Jersey business owners can get discounts by paying their premium in full or buying multiple policies from The Hartford.
New Jersey Manufacturers
New Jersey Manufacturers is a regional carrier offering workers’ compensation insurance in New Jersey as well as Connecticut, Delaware, Maryland, New York, and Pennsylvania. A top commercial insurance company, rated an A+ (Superior) by A.M. Best for its strong financial stability, New Jersey Manufacturers has been the leading workers’ comp insurance provider in New Jersey for more than 70 years. New Jersey Manufacturers is also recognized for outstanding claims satisfaction
New Jersey Manufacturers is the right choice for small business owners who want to work with a local carrier for its expertise in state regulations and better understanding of risks in certain industries. The insurer focuses on workplace safety by offering customers the tools they need to help with loss prevention efforts.
AmTrust Financial is a bit of a newcomer in the small insurance space but has grown to be one of the largest commercial insurers in just 20 years. The company is an ideal insurer for new ventures in New Jersey. Carriers typically balk at covering startups or new businesses because it’s difficult to predict the chance of paying claims.
AmTrust Financial can provide workers’ compensation insurance for new businesses in multiple industries. Even if your business has unique, never-seen-before risks, AmTrust can write a workers’ comp policy to meet your needs. Bonus: It offers competitive prices on multiple types of business insurance.
AP Intego, a leading commercial insurance broker, is a great choice for New Jersey employers seeking a streamlined platform for their workers’ comp and payroll services. The company uses advanced technology to offer pay-as-you-go workers’ compensation insurance that integrates with your payroll service, like Gusto or Square, to automatically deduct the appropriate premium every month.
AP Intego’s integrated approach also makes it an excellent choice for business owners who want to save time and money while also making their premium audit simpler. Because the company withdraws a percentage of premium each time you run payroll, your business can free up cash flow.
Employers, a national carrier, is unique because it only offers workers’ compensation insurance. With only one type of coverage offered, it has a deep understanding of workers’ comp risk to draw on when writing policies. It’s an ideal choice for New Jersey business owners seeking to reduce their premiums.
Employers helps business owners save money by performing a hazard analysis, offering management and supervisory safety programs, and providing employee safety presentations and training for no extra cost. By establishing a work safety program and creating a culture of safety at your business, you can help reduce your future rates by limiting your chance of a claim.
What Workers’ Compensation Insurance Is
Employers obtain workers’ compensation insurance to provide their employees with medical coverage and lost income replacement. In exchange for coverage, employees give up their right to sue employers for occupational illnesses and injuries except in extreme circumstances. Workers’ comp requirements vary by state. Some laws mandate business owners carry workers’ comp even when they have just one employee.
While workers essentially give up their right to sue for their workplace injuries, there are some situations when a civil suit may be filed by an employee. In these cases, workers’ compensation insurance typically includes employer’s liability coverage to pay for your legal defense.
What New Jersey Workers’ Compensation Insurance Covers
New Jersey workers’ compensation policies provide medical treatment and wage replacement for work-related injuries. Injured workers receive income replacement of up to 70% of their gross weekly wage if they miss more than seven days of work. Death benefits and funeral expenses are also available for workplace injuries resulting in the death of an employee.
New Jersey workers’ compensation insurance typically covers:
- Medical expenses: Covers the cost of reasonable medical treatments and care as well as physical and occupational therapy; insurers and/or employers have the right to designate medical providers
- Temporary disability benefits: Provides up to 400 weeks of income to an employee who is unable to work to replace lost wages
- Permanent disability benefits: Compensates employees for the continued effects of an injury, initially up to 450 weeks
- Funeral expenses: Pays up to $3,500 in burial costs of an employee who died as a result of a workplace injury or illness
- Death benefit: Pays surviving dependents based on the loss of income from the deceased employee
For employers, workers’ compensation insurance in New Jersey covers financial liabilities for work-related injuries and illnesses as well as legal representation if an employee files a lawsuit. An injured employee receives benefits regardless of who was at fault in an accident or injury. Benefits may double for minors hired in violation of child labor laws.
What New Jersey Workers’ Compensation Doesn’t Cover
Workers’ compensation covers employees’ workplace injuries and illnesses by reimbursing a portion of their lost income and paying their care-related costs such as medical bills. Employees only receive benefits if their injury occurs in the scope and course of their regular work duties. If they’re injured outside of work, it typically won’t qualify for a claim.
Workers’ compensation insurance usually doesn’t cover self-inflicted injuries or injuries sustained while:
- Commuting to or from work
- Committing a crime or violating company policies
- Not following proper safety protocols or not wearing appropriate safety gear
- Under the influence of drugs or alcohol
Additionally, workers’ comp does not cover third party, or non-employee, injuries. Those incidents are usually covered by general liability insurance.
New Jersey Workers’ Compensation Insurance Costs
New Jersey workers’ compensation insurance costs are determined by three main factors: work risk, loss history, and payroll. The average New Jersey employer pays $1.51 per $100 of payroll, according to the National Association of Social Insurance, but premiums range between 72 cents and $19.72 per $100.
To determine New Jersey workers’ compensation premiums, insurance companies begin by assigning business class codes by industry. These codes represent how risky the risk is. The New Jersey Compensation Rating and Inspection Bureau establishes regulations and rates for workers’ compensation insurance, and there is a single rate for each code. Once an employee’s work is classified, it’s assigned a rate. This rate is multiplied by total payroll and an experience modifier.
The basic formula for determining workers’ comp premiums is:
Payroll (per $100) X Classification Rate X Experience Modifier = Premium
The employer’s experience modifier, or e-mod, is a numeric representation of the company’s claim experience. Generally, employers with less severe accidents than other similar businesses pay less in premiums. Workers’ comp costs by state vary widely due to different classification codes.
New Jersey Workers’ Compensation Insurance Cost Example
A business’s class code is based on the risk of an employee’s work. The riskier the job, the higher an employer’s workers’ comp premium is. For example, in New Jersey, a restaurant (class code 9082) has a rate of $3.95 per $100 of payroll. A restaurant is a reasonably safe line of work.
Take a business with greater risks: A contractor (class code 5506) has a rate of $11.95 per $100. Construction businesses typically face a higher risk of injury, so employees in these industries generate higher premiums. However, two contractors who take on the same type of jobs may still have different rates because of their claim history.
New Jersey Workers’ Comp Premium Discounts
New Jersey employers with a workers’ comp policy premium greater than $5,000 are eligible to receive automatic premium discounts. Discounts are given as a percentage of gross premium—a larger premium generally generates a higher discount. Insurance carriers are required to automatically apply discounts based on the current New Jersey premium discount formula. Discounts are not available for state fund policies.
New Jersey Workers’ Compensation Audit Requirements
Because a business’s payroll and staff can change at any time during the life of a workers’ compensation policy, most insurance carriers require a premium audit at the end of the policy period. Some insurers may also audit a business if it closes or drops its coverage before the end of the policy. Employers who hire during the policy term may end up owing an additional premium after an audit.
New Jersey small business owners can prepare for a premium audit by gathering relevant documents, including:
- Payroll journal
- Tax reports, both state and federal
- Employee records, including subcontractors and independent contractors
- Overtime payroll records
- Job contracts and invoices
- Employee time cards and job descriptions
- Contract labor agreements
- Bank records
If you feel you’ve been treated unfairly during an audit, you will need to reach out to your insurance carrier.
New Jersey Workers’ Compensation Insurance Laws
In New Jersey, unless covered by a federal program, all businesses with employees must obtain workers’ compensation insurance. This includes corporations, limited liability companies, and sole-proprietors, as long as at least one person is paid to perform services for the business. This also applies to full-time and part-time employees, and lawfully or unlawfully employed workers.
Three types of employers in New Jersey who must maintain workers’ compensation insurance include:
- Corporations: Corporations must carry workers’ comp in New Jersey if any individual performs services for pay, including corporate officers
- Partnerships or limited liability companies (LLC): All partnerships and LLC must carry workers’ comp in New Jersey, but partners and members may exclude themselves from coverage
- Sole proprietorship: Sole-proprietors need workers’ compensation for their employees, but they do not have to include themselves in coverage. Some, however, may opt for self-employed workers’ comp coverage
The New Jersey Division of Workers’ Compensation provides a guide to workers’ compensation as well as additional information on its website. Out-of-state employers might need workers’ comp coverage if they enter a contract of employment in New Jersey or if they perform any work in the state.
New Jersey Workers’ Compensation Insurance Deadlines
New Jersey business owners should obtain workers’ compensation insurance as soon as they hire an employee, whether that person works full- or part-time, to ensure they’re adequately covered from the start. Gaps in coverage may mean your carrier can deny a claim, or you might face a penalty for not having adequate coverage.
Here are some key workers’ compensation insurance deadlines for employers and employees in New Jersey to know:
- Employees must be unable to work for seven days (including weekends and holidays) before they are eligible for temporary disability benefits
- Employees should notify their employer as soon as possible about an injury or accident to receive compensation—notice does not have to be in writing
- Employees should make a request for medical treatment to their employer as soon as possible
- Once notified, employers should notify their carrier immediately to file a First Report of Injury form with the state
- The insurance carrier is required to submit the Subsequent Report of Injury form within 26 weeks after the employee returns to work or reaches maximum medical improvement
These deadlines typically apply to employees, but it’s smart for business owners to know what to expect. Talk to your insurance carrier to learn about deadlines you must follow to comply with the requirements of your specific workers’ compensation policy.
New Jersey Workers’ Compensation Insurance Requirements
New Jersey requires employers post a notice from your insurance carrier in a common area that explains the basic benefits of workers’ compensation coverage. This information should also include an explanation for employees about how, when, and to whom to report an injury, and where to go for medical treatment if injured while working.
Businesses should also keep accurate records of any workplace injuries and report any work-related injuries or illnesses to their insurer as soon as possible.
New Jersey Workers’ Compensation Insurance Penalties
Penalties in New Jersey can be steep for failure to provide workers’ compensation coverage, even without a workplace injury. A failure to insure employees is deemed a criminal offense with penalties of up to $5,000 for the first 10 days and another $5,000 for each additional 10-day period without required workers’ comp coverage.
If there’s a case involving workplace injuries without the required coverage, the employer and its corporate officers can be held liable. Penalties assessed for failure to insure are not dischargeable in bankruptcy.
New Jersey Workers’ Compensation Self-Insurance Requirements
Approved businesses in New Jersey may self-insure by submitting an application to the Commissioner of the Department of Banking and Insurance. Approval is based upon the financial ability of the employer to meet state requirements. A self-insured employer has the option of handling its own workers’ comp claims or contracting with a third-party administrator.
How to File a New Jersey Workers’ Comp Claim
If your employee experiences a workplace injury or occupational illness, report it to your workers’ comp insurance carrier as soon as possible. Unlike some states, notice from your employee does not need to be in writing. If your employee fails to report their injury within 90 days, they may lose their right to collect benefits.
Once reported, your insurance company will complete a First Report of Injury form, then submit it to the New Jersey Division of Workers’ Compensation to begin the claim. The insurer then notifies your employee whether their claim qualifies for benefits. If it’s approved, the employee will begin receiving disability benefits. If their claim is denied, they may appeal the decision.
New Jersey Workers’ Compensation Insurance Frequently Asked Questions (FAQ)
Workers’ compensation insurance regulations vary widely from state to state, making it complicated for business owners to understand. Here are a few commonly asked questions about workers’ comp in New Jersey.
Do I have to hold the jobs of workers who are out on workers’ compensation?
State law in New Jersey only prohibits the firing of an employee in retaliation for filing a workers’ comp claim or testifying at a hearing. If you terminate an employee because of their condition, they may be able to file a claim for violation of the Americans with Disabilities Act.
What can I do to control rising premium costs for workers’ compensation?
One of the most effective ways to help reduce your workers’ compensation costs is to establish a demonstrated commitment to safety. This might include establishing a formal employee safety training program, creating a return-to-work program for your employees, and maintaining open communication with your employees. Keep your number of claims low to help reduce rates.
How long must a worker be unable to work to qualify for workers’ compensation?
In New Jersey, employees must be unable to work for seven days, including holidays and weekends, before they are eligible for temporary disability benefits. The days do not need to be consecutive. Additionally, there is no waiting period to receive medical benefits or permanent disability benefits, if warranted.
Workers’ compensation insurance is a requirement for all businesses with at least one employee in New Jersey. It’s expensive, but it protects your business from liability by covering expenses for costly workplace injuries or illnesses. Keep your workers’ comp costs low by taking preventive measures to ensure a safe work environment.
The Hartford can help New Jersey employers find affordable workers’ compensation insurance. Its application process takes just minutes to complete, and it offers discounts for buying multiple commercial policies.