The Importance of Workers’ Comp Insurance

Mark Tullis, Administrator, LCI Workers’ Comp


Most business owners know that workers’ compensation insurance is required by State law to compensate injured workers and cover their medical expenses, but not all owners fully realize the comprehensive benefit that their workers’ comp policy provides to their employees.

Nobody likes paying for insurance, especially when the purchase of that insurance is mandated by law. But if you focus less on the pure cost of the insurance and instead focus on the benefit that the insurance covers, you may actually come to the conclusion that workers’ comp insurance is a very good value.

But before looking at the benefits of workers’ comp, you first have to look at the cost of the policy. And, for many Louisiana businesses, they have seen that cost decline in the last ten years. Why? The primary reason is that the workplace is much safer now than in the past because of technological advances and automation. Equipment is now safer, requires less human interaction, and is much more affordable than in the past. But a secondary reason is that the workers’ comp market in Louisiana is very competitive, with dozens of carriers eager to sell businesses a workers’ comp policy, including more than eight Louisiana-based workers’ comp companies. Competition always drives prices down, so right now workers’ comp premiums are relatively affordable.

In exchange for those premiums, business owners are securing a valuable benefit for their workers. Should a worker be injured on the job and not be able to work, that worker will receive, from the workers’ comp company, a weekly benefit check to make up for his lost wages while not being able to work. These weekly checks help the worker and his family maintain their standard of living, paying housing expenses, utilities, car notes and food. These weekly benefit checks are tax-free. The medical benefits are as good as, if not better than, most private health insurance plans, because when a worker is being treated under a workers’ comp policy, there is no out of pocket cost for the worker. Not even a co-pay. With the workers’ comp provider covering these expenses, the employers can focus their resources on their business.

So each month when you pay your workers’ comp premium you should feel confident and proud that you are providing your workers with a first-class benefit that, in the case of a serious accident or even death, can keep that worker’s family whole and able to continue to sustain itself financially.

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