Ensuring the safety and well-being of employees has become a top priority for responsible employers. One key mechanism in place to provide financial protection for both workers and employers is workers’ compensation insurance.
However, according to Insurance Business America, workers’ comp insurance often fails to provide adequate coverage to employees. This is where excess insurance benefits can come in to help. These benefits provide an additional layer of coverage when standard workers’ compensation limits are exceeded.
In this article, we’ll highlight the reason why employers should consider optimizing workers’ comp with excess insurance benefits.
Enhanced Financial Protection
According to the Bureau of Labor Statistics, over two million injury and illness cases were reported in the US private industry in 2021. Every year, these case numbers are usually in the millions.
When an employee sustains an on-job injury or illness, workers’ compensation insurance covers medical expenses, lost wages, and rehabilitation costs. However, there are cases where the standard limits of workers’ comp may not be sufficient to address the financial burden associated with severe claims. Excess insurance can help employers in this situation.
Excess insurance provides an additional layer of protection once the primary workers’ compensation limits are exhausted. According to Prescient National, excess insurance allows employers to ensure that they are well-prepared to handle extraordinary claims without facing crippling financial consequences.
This extra security can make a significant difference in managing unexpected costs and safeguarding the financial stability of the company.
Peace of Mind for Employees
As reported by the Carrier Chronicles, injured employees often experience immense stress and anxiety while dealing with the consequences of their workplace injuries. The fear of not having adequate coverage to meet their medical and financial needs can compound their suffering.
Excess insurance benefits offer peace of mind to both employees and their families. By providing this additional layer of financial protection, employers can demonstrate their commitment to their employees’ well-being.
This fosters a sense of trust and loyalty among the workforce. At the same time, it also contributes to a more positive workplace environment, where employees feel valued and cared for.
Minimized Financial Risk
Without excess insurance benefits, employers may find themselves exposed to significant financial risks. A severe workplace injury can lead to costs exceeding the standard workers’ compensation limits. In that case, the employer is typically responsible for covering the excess expenses. This can have a cascading effect, potentially leading to increased insurance premiums, legal battles, and even bankruptcy in the most extreme cases.
Excess insurance helps mitigate these financial risks by stepping in to cover the excess costs. This means that employers can focus on supporting their employees and their recovery instead of worrying about the financial repercussions of a workplace incident. This can protect both the financial health of the company and its long-term sustainability.
Attractive Recruitment and Retention
Talented employees are the backbone of any successful organization. In today’s competitive job market, offering robust employee benefits can make a significant difference when it comes to attracting and retaining top talent. The availability of excess insurance benefits is a strong indicator of a company’s commitment to its employees’ well-being. It makes for an attractive proposition for prospective hires.
Besides, when existing employees know they have access to excess insurance benefits, they are more likely to remain loyal to their current employer. The sense of security and peace of mind provided by this extra layer of coverage can result in higher job satisfaction. That, in turn, reduces turnover rates and the associated costs of recruiting and training new employees.
Competitive Advantage in the Marketplace
By optimizing workers’ compensation with excess insurance benefits, employers position themselves as responsible, ethical, and employee-focused organizations. This can be a powerful differentiator in the marketplace, attracting socially conscious consumers and partners, and enhancing the company’s reputation.
Moreover, this can also paint the employer in a positive image. Here, the employer is seen as someone who goes above and beyond to ensure the financial security and well-being of their workforce.
This positive image can help with branding and strengthen relationships with clients, suppliers, and investors. It can also lead to opportunities for collaboration and partnerships with organizations that share similar values and priorities.
As you can tell from the discussion so far, providing workers’ compensation with excess insurance benefits holds numerous benefits for employers. That’s why business owners should consider offering these additional coverages. In doing so, they can protect their employees’ well-being while also enjoying several benefits themselves.