10 Red Flags Your Current Workers' Compensation Policy Isn’t Enough

Workers' compensation insurance is a vital safeguard for businesses, ensuring employees receive medical care and wage replacement in the event of a workplace injury. However, not all policies provide the comprehensive coverage your business needs. If your current policy has gaps, it could leave you vulnerable to unexpected costs, compliance issues, and lawsuits. Here are 10 red flags that signal your workers' compensation policy might not be enough.

1. Coverage Doesn’t Meet Alabama’s Requirements

Workers' compensation laws vary by state, and Alabama has specific requirements for businesses with five or more employees. If your policy doesn’t meet state regulations, you could face penalties and liability risks.

2. Your Policy Has Low Coverage Limits

If an employee suffers a severe injury, your policy should cover medical expenses, lost wages, and rehabilitation costs. If your coverage limits are too low, your business may have to pay out-of-pocket for the remaining expenses.

3. You Haven’t Reviewed Your Policy in Years

Workers' compensation laws and industry risks change over time. If you haven’t updated your policy recently, you may have gaps in coverage that leave your business exposed to financial risk.

4. Your Industry’s Specific Risks Aren’t Covered

Different industries have different levels of risk. A standard policy may not provide enough protection for high-risk jobs in construction, manufacturing, or transportation. If your policy isn’t tailored to your business’s specific risks, it may not cover all potential injuries.

5. You Have Employees in Multiple States

If your business operates in more than one state, you need to ensure your workers' compensation policy complies with each state’s regulations. Alabama’s laws may not apply elsewhere, leaving employees unprotected if an accident occurs outside the state.

6. You’re Paying More Than You Should

Workers' compensation premiums are based on risk factors like payroll, industry classification, and claim history. If your premiums keep rising, you may be misclassified or missing out on cost-saving programs that could reduce your costs.

7. You Don’t Have a Return-to-Work Program

A structured return-to-work program helps injured employees transition back to work safely, reducing claim costs and keeping insurance premiums in check. If your policy doesn’t support this, you may be paying more than necessary.

8. Your Claims Process is Slow or Confusing

A slow or complex claims process can frustrate employees and increase legal risks for your business. If claims take too long to process or your insurer isn’t responsive, it may be time to reevaluate your provider.

9. Your Policy Doesn’t Cover Occupational Illnesses

Some workers’ compensation policies only cover workplace injuries and exclude long-term health conditions caused by exposure to hazardous substances. If your employees are at risk for occupational illnesses, make sure your policy includes coverage.

10. You Haven’t Consulted with an Insurance Expert

Workers’ compensation insurance isn’t one-size-fits-all. A knowledgeable insurance agency, like Thomas Harrison & Associates Insurance Agency in Daphne, Alabama, can help you find the best coverage to protect your business and employees.

Is Your Business Fully Protected?

If any of these red flags sound familiar, it may be time to review your workers’ compensation policy. At Thomas Harrison & Associates, we help businesses in Alabama find affordable, comprehensive coverage that meets their needs. Contact us today for a free policy review and ensure your business is protected.