New York Workers’ Compensation Insurance: Top Providers & Rules

New York workers’ compensation insurance pays for medical costs, medications, rehabilitation services, and lost wages when an employee is injured at work. Workers’ compensation insurance New York costs an average of $3 to $3.49 per $100 of payroll costs paid. Premium rates vary per business type, past claim history, and carrier.

Small business owners can get workers’ compensation insurance from a private carrier, the New York State Insurance Fund or through self-insurance. Don’t assume the state fund is the best option for all business types. The Hartford is a top-rated small business insurance carrier. You’ll get competitive rates dropped into your email within five minutes of completing one online application.

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New York Workers’ Compensation Insurance Providers

A New York small business owner can purchase workers’ compensation insurance through private carriers, the state insurance fund, join a self-insured group. When shopping for workers’ compensation providers, consider the financial strength of the company and its rates for your specific industry and profession. Insurance provider rates reflect the industries they prefer to insure.

Top New York Workers’ Compensation Insurance Companies

The New York State Insurance Fund

The New York State Insurance Fund, founded in 1914 after the New York Workers’ Compensation Act was passed, is one of the largest workers’ compensation carriers in the nation. The fund guarantees every employer has the availability of workers’ compensation insurance.

The New York State Insurance Fund is a good option for any small business owner wanting to shop and compare prices after rate increases or just starting a business. Any business having a hard time finding New York workers’ compensation because of job duties or loss history should get a quote from The New York State Insurance Fund. For more information on the state fund, please go to our section on the New York State Insurance Fund.

The Hartford

The Hartford is the premier commercial insurance carrier for small businesses in the country. This carrier is highly competitive with workers’ compensation insurance and makes it easy for small business owners to get all insurance needs properly covered in one place. The Hartford is widely known for adding inclusions like extended filing for policies other carrier charge for as riders.

The Hartford is an ideal choice for Main Street companies that serve the day to day needs of a community. While most business niches can find just about every coverage available through this carrier, it best serves small to midsize businesses of conservative risk levels like office jobs and home service providers.

Travelers Group

Travelers Group is the largest carrier of New York workers’ compensation insurance policies in the nation. This provider serves a very diverse group of industries with a major presence in healthcare and medical services. They offer all lines of business insurance and are an international company able to serve clients’ workforce everywhere.

Businesses in the medical and healthcare field including home care providers, physical therapists, and occupational therapists are a terrific fit for Travelers Group. Rates are most competitive in these industries, but Travelers does serve most industries and risk categories effectively.

AIG

AIG is an international insurance company that offers insurance for every size of business imaginable. They cover sole proprietors and Fortune 500 Companies with the same level of care and risk management. This carrier has all business insurance lines as well as specialty lines such as employment practices and kidnap and ransom insurance.

AIG is a great option for service providers who have some degree of risk in their work. These include home service providers like plumbing companies or heating, ventilation, and air conditioning (HVAC) installation services. A company with business that crosses state lines is another great fit for AIG’s workers’ compensation insurance policies.

Liberty Mutual

Liberty Mutual is a household name for auto and home insurance but is growing as a national carrier for commercial insurance lines. It maintains local offices making it easy for clients to get a personal touch while handling insurance matters. Liberty Mutual prides itself on its risk assessment and prevention work with clients.

Small companies with less than five employees are the sweet spot for Liberty Mutual New York workers’ compensation insurance policies. It is effective when housing all personal and business insurance needs for local businesses in low-risk categories such as accounting or retail.

What New York Workers’ Compensation Covers

Workers’ compensation insurance protects workers from injuries and illnesses obtained while at work. It pays for medical expenses incurred at the time of injury and subsequent medical bills related to healing and rehabilitation. It also covers partial wage payments to help the injured party continue paying bills until they can return to work.

Workers’ compensation insurance policies cover key areas after an injury:

• Medical expenses: Pays all medical expenses related to the injury including emergency room, surgery, and medications
• Rehabilitation expenses: Pays expenses so that the injured party can recover ― fully if possible ― or per maximum medical improvement
• Occupational therapy: Covers costs to retrain an employee in a similar or new job to return to work if they are unable to return to their original job
• Long-term disability: Moves workers’ compensation benefits to long-term disability payments when a worker is deemed to have injuries leading to disabilities
• Beneficiary expenses: For workers who die as a result of their injuries, beneficiaries are paid burial costs and may even get settlement payments for earner’s lost wages
• Wages while out injured: Pays up to two-thirds of the injured person’s average weekly wage (AWW) as determined by the previous 12 months of income
• Employer Liability: Protects the small business from costs associated with civil lawsuits and defending against fraudulent claims

Small business employers can choose different coverage options for workers’ compensation. It is possible to get policies with limits as low as $300,000 per incident with a $600,000 aggregate. If your workers’ compensation insurance doesn’t cover the entire cost of all claim payments, you may be subject to civil lawsuits.

Although New York workers’ compensation insurance pays employees for costs associated with being hurt at work, it protects employers. The financial costs and penalties for not having workers’ compensation are extreme and could result in financial insolvency of the company.

New York Workers’ Compensation Insurance Laws

State workers’ compensation requirements vary greatly. In New York, state law requires nearly every employer to maintain workers’ compensation insurance for employees. It doesn’t matter if employees are family members, part-time workers, or leased employees. All work injuries that happen during the course of work are covered by New York laws.

New York has workers’ compensation insurance legally mandated timelines:

• Injured party notification: An injured worker must inform their employer within 30 days after the date of injury to prevent losing their right to workers’ compensation benefits
• Occupational disease notification: Workers getting a disease as a result of work-related tasks has two years to notify an employer from the date of illness or awareness of illness being work-related
• Statutes of limitations: In New York, the statute of limitations is two years from the injury or illness awareness or the last payment made by the employer

Employers filing a workers’ compensation insurance claim must first notify the insurance company and then complete an Employer’s Statement of Wage Earnings (Form C-240) with the Workers’ Compensation Board.

New York Workers’ Compensation Insurance Penalties

A business that doesn’t meet the New York state law requirements of maintaining workers’ compensation insurance is subject to a $2,000 penalty for every 10 days of noncompliance. Additionally, small business owners could face misdemeanor or felony charges with fines starting at $1,000 and going as high as $50,000. Failure to comply can lead to a cease and desist of business operations.

Self-insured and Self-insured Groups for New York Workers’ Comp

Being self-insured or participating in a self-insured workers’ compensation group means you don’t buy insurance from a private carrier or the state fund. You demonstrate the assets needed and meet the claim eligibility requirements to get approval to self-insure.

A small business choosing to self-insure workers’ compensation has two choices: become an individual self-insurer or become a member of a self-insured group. All requirements must be met to become eligible for self-insurance programs. Applications are submitted to the New York Workers’ Compensation Board.

The self-insured requirements in New York include:

• A minimum deposit of $1,411,000: This is increased based on payroll and classification code
• Complete the SI-1: The application for self-insurance from the New York Workers’ Compensation Board is required to self-insure
• Independently audited financial statements: A three-year history prior to the application
• Payroll reports: Current and five-year historical breakdown of class codes and wages
• Loss history: A complete five year loss-history run with prior carrier audit and experience modification
• New York company registration: These might include certificates of incorporation, partnership agreements, and employer identification numbers

A self-insured group operates following similar guidelines to the individual self-insured company. A group consists of two or more companies with related business activities and class codes. All members must remain in good standing with any required trade association. Most groups are established as trusts under New York law for the purpose of insuring members for workers’ compensation claims.

New York State Insurance Fund

The New York State Insurance Fund is the largest workers’ compensation insurance provider in New York and ranks among the largest in the nation. It is a not-for-profit carrier that covers companies in a variety of industries but is best suited for companies unable to find reasonable coverage elsewhere.

When it comes to workers’ compensation insurance, New York is a competitive insurance state. The New York State Insurance Fund is the largest because it serves the businesses unable to get workers’ compensation insurance at a favorable rate or at all with other carriers. That being said, it maintains competitive underwriting standards to remain profitable as an independent carrier.

New York Workers’ Compensation Insurance Costs

Workers’ compensation insurance carriers base rates on several common factors plus its own internal set of underwriting risk evaluation. The three common factors are payroll, work class, and the experience modification rate (EMR). This is nationally recognized, but rates are adjusted per carrier guidelines and state pricing. Colorado rates average 95 cents per $100 of payroll.

The formula for determining workers’ compensation insurance rates is:

Premium = Classification code rate x EMR x Payroll per $100

The EMR is defined by your claim history. An EMR of 1.0 is considered an average number for your industry. An EMR of 1.2 could theoretically increase rates by 15% to 20% for workers’ compensation, so it is important to keep work injuries to a minimum.

The insurance carrier will perform this premium rating for each class code based on their own underwriting preference. Insurance carrier prices are not exclusively based on the formula. Once the formula is calculated, the carrier determines its underwriting rates.

New York Workers’ Compensation Rate Variations

New York Workers’ Compensation Insurance Audit Requirements

A workers’ compensation insurance audit serves to verify the actual payroll numbers for the policy period and define the EMR for the renewal. The audit is used by workers’ compensation insurance carriers to confirm the actual payroll numbers per work class to finalize that annual premium for the policy period that is ending. It then uses the data to estimate the renewal.

For example, take an art store owner in Albany who started a workers’ compensation policy 10 months ago when he hired an assistant. He knew he was going to pay her $15 per hour for 40 hours a week. Assume that the work class is rated at $1.10, a full year of work with two weeks of vacation would be 2,000 hours or an estimated $30,000. His estimated premium is $30,000 / $100 * $1.10 = $330.

Maybe he fires her halfway through the year. His total payroll would go down. His premium audit would send him a refund. If he ended up hiring her and then adding another person, his premium audit would show higher payroll and bill him for the difference. The current numbers are used to estimate the next premium period.

Another example is a new home installation company in Buffalo that needs a policy before his employees start in January. His small team of three is expected to earn $5,000 a month. If all three employees work a full 12 months, his payroll would be $180,000. At a low job class code rate of $8.01. That estimates $14,418 in workers’ comp premium the day he starts.

There is no way for the insurance company to know if he keeps all employees if they work all weeks or if he hires anyone new. If his team drops to two employees, the audit will provide him with a refund of premium. If he hires other people, it will bill him for the additional premium

New York Workers’ Compensation Deadlines

Employers must obtain workers’ compensation insurance and have it effective before the first employee punches in. Failure to do so can result in criminal prosecution and a variety of fines up to $50,000. Filing injury reports must be done timely to protect the rights of both the employer and employee.

Some claim filing deadlines with New York workers’ compensation insurance are:

• Worker injury reporting: Injured parties must report the incident within 30 days to retain rights to a claim; employers should provide Form C-3 to complete the claim
• Business reporting: Employers have 10 days from the receipt of the Form C-3 to submit a Form C-2 to the Workers’ Compensation Board
• Statute of limitations: Injured parties have two years from either the date of the incident or of the last AWW or payment to file a further claim for the same incident

Employees failing to meet the required deadlines could forfeit their rights to workers’ compensation benefits. Employers failing to meet the deadlines could face penalties assessed by the New York Workers’ Compensation Board.

How to File a Workers’ Compensation Claim in New York

It is important to file New York workers’ compensation insurance claims as quickly as possible to make sure no delay in benefits occurs. When someone gets hurt on the job, everyone must do their part to preserve both the employee’s rights and the employer’s rights for medical and wage benefits.

Follow these guidelines when filing a workers’ compensation claim:

1. Employee seeks medical attention; informs employer within 30 days of the incident date.
2. Employer notifies insurance carrier immediately.
3. Employer or insurance carrier notify Workers’ Compensation Board within 10 days.
4. Employee notified with the form employer’s report of work-related injuries/illness within 14 days of written reporting of the incident
5. Payment of benefits begins within 18 days of receipt of form employer’s report of work-related injuries/illness

New York does not allow electronic signatures for claimants on any documents of receipt of forms at this time. This means that all forms must be signed and returned as originals to complete the process.

Tips on Getting New York Workers’ Compensation Insurance

Here are tips on getting policies and keeping New York workers’ compensation costs down:

Break Down Your Employees by Class Codes

Look at what each employee’s main job function is. The role of clerical employees is much less risky than the duties of a mechanic. If you rate everyone at the highest risk job class, your rate will be inflated unnecessarily. Take the time to break down employees by class code to save on premium and properly insure your team.

Prepare for Renewals In Advance

Workers’ compensation renewals require an audit to review the previous year’s activity and finalize the real payroll numbers for each work class. This audit not only finalized the past year’s premium but determines the renewal premium. Plan on preparing all payroll data and any loss history and provide it quickly to your workers’ compensation insurance carrier.

Establish Safety Programs & Train Employees

Many insurance carriers require or provide discounts to small businesses that have safety programs written, posted safety protocol and reminders, and hold team training. Carriers understand that a business concerned with preventing workers injuries is mitigating the total potential workers’ compensation claims. General liability doesn’t cover injured employees.

Use an Integrated Payroll Provider

Shop for a workers’ compensation insurance provider who integrates payroll into the monthly premium. This performs mini-audits so that you are paying more accurate payroll rates every month. Integrated payroll makes the audit process much easier and often without the stress of getting a large bill if your estimate was significantly lower than actual payroll costs. Consider a company like Gusto for integrated payroll services.

New York Workers’ Comp Frequently Asked Questions (FAQs)

Companies have a lot to consider when buying workers’ compensation insurance in New York. If you still have questions, visit our forum or drop a comment below. Making sure New York business owners understand their options is our number one goal.

1. Do single member LLCs need workers’ compensation insurance?

Single-member limited liability companies (LLCs) are not required to maintain New York workers’ compensation insurance. If there are any paid employees to the LLC, those individuals must be covered by workers’ compensation. The waiver for the single member LLC party is obtained from the insurance carrier.

2. How long before I can self-insure workers’ comp?

The application process requires companies to show financial statements for a minimum of three years and five years of prior insurance carrier audits including experience ratings and loss history. Without this previous experience, small businesses will have a hard time self-insuring but may become eligible through a New York self-insurance group.

3. Are 1099 employees covered by workers’ comp?

Independent contractors who receive a 1099 Form are not covered under most workers’ compensation claim scenarios. There are exceptions to this like protection given to employees of subcontractors. A workers’ compensation claim for independent contractors will often result in court proceedings.

The Bottom Line

Workers’ compensation protects employers from the potential costs of claims from workers injured on the job. It pays expenses including medical providers, treatments, medications, and wages for claims. Failing to maintain workers’ compensation results in fines up to $50,000 and civil lawsuits from injured employees not adequately covered.

New York is a competitive state where private carriers and even self-insured options are widely available. Consider all your options when shopping for protection and competitive premiums. The Hartford makes shopping for New York workers’ compensation easy with an online application that is easy to complete to get the coverage you need now.

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