Workers Comp FAQ | Midwest Work Comp Solutions LLC

Question 1

What is workers compensation insurance?

Accepted Answer

Workers compensation (work comp) is a state-mandated insurance policy that covers medical expenses and lost wages for employees who are injured or become ill as a result of their job. It also protects employers from lawsuits related to workplace injuries.

Question 2

Is workers comp required in my state?

Accepted Answer

In nearly every state, yes — if you have employees, you are legally required to carry workers compensation insurance. Requirements vary by state, industry, and number of employees. Some states exempt very small employers or certain types of workers (like sole proprietors), but the penalties for non-compliance can be severe, including fines and stop-work orders.

Question 3

Does workers comp cover independent contractors?

Accepted Answer

Generally, no — workers comp covers W-2 employees, not 1099 independent contractors. However, misclassifying employees as contractors is one of the most common (and costly) audit findings. If you regularly direct how, when, and where someone works, they may legally be considered an employee regardless of how you pay them.

Question 4

What does a workers comp policy actually cover?

Accepted Answer

A standard policy covers: medical treatment for work-related injuries or illnesses, lost wages while the employee recovers, rehabilitation costs, and death benefits for the employee's family. It also covers your legal defense costs if an injured employee sues you — up to your policy limits.

Question 5

How is my workers comp premium calculated?

Accepted Answer

Your premium is based on three main factors: your payroll (more payroll = higher premium), your job classification codes (which reflect the risk level of the work your employees do), and your experience modifier (a multiplier based on your claims history). Errors in any of these three areas — especially misclassified job codes — are the most common reason businesses overpay.

Question 6

What is an experience modifier (e-mod)?

Accepted Answer

Your experience modifier (or e-mod) is a number calculated by your state's rating bureau that adjusts your base premium up or down based on your actual claims history compared to similar businesses. An e-mod of 1.0 is average. Below 1.0 means you pay less; above 1.0 means you pay more. A single large claim can raise your e-mod for up to three years.

Question 7

Why might I be overpaying for workers comp?

Accepted Answer

The most common reasons: your employees are classified under the wrong job codes (which carry higher rates than your actual work warrants), your e-mod is inflated by claims that were mishandled or not properly closed, you're with a carrier that doesn't specialize in your industry, or you haven't shopped the market in several years. A free policy review can identify all of these.

Question 8

How much can I realistically save by switching carriers?

Accepted Answer

It varies widely by industry and payroll size, but we regularly find savings of 10–30% for clients who haven't reviewed their policy in two or more years. The biggest savings typically come from correcting classification errors and moving to a carrier that specializes in your trade.

Question 9

What should I do immediately after a workplace injury?

Accepted Answer

First, make sure the employee gets medical attention. Then report the injury to your insurance carrier as soon as possible — most states have strict reporting deadlines (often 24–72 hours). Document everything: the date, time, location, what happened, and who witnessed it. Delayed reporting is one of the most common reasons claims become more expensive and contentious.

Question 10

How do claims affect my future premiums?

Accepted Answer

Claims affect your experience modifier, which in turn affects your premium for the next three policy years. The impact depends on the size and type of the claim. Medical-only claims (no lost time) have a much smaller impact than lost-time claims. This is why proper claims management — including return-to-work programs — matters so much.

Question 11

What is a workers comp audit?

Accepted Answer

At the end of each policy year, your carrier conducts a payroll audit to reconcile your actual payroll against the estimated payroll you were charged for. If your actual payroll was higher, you owe additional premium. If it was lower, you get a refund. Audits can also catch classification errors — which is why it's important to have an agent review your audit results before you pay.

Question 12

Can I be penalized for not having workers comp?

Accepted Answer

Yes — and the penalties are serious. Depending on your state, operating without required workers comp coverage can result in fines of thousands of dollars per day, a stop-work order that shuts down your business, personal liability for any injuries that occur while uninsured, and criminal charges in some states. It's one of the highest-risk compliance gaps a small business can have.

Question 13

What does a free policy review actually involve?

Accepted Answer

We look at your current policy declarations page, your job classification codes, your experience modifier, and your payroll breakdown. We compare your current rate against what's available in the market for your industry and state. The whole process typically takes less than 10 minutes of your time — we do the legwork. There's no obligation to switch.

Question 14

How are you different from going directly to an insurance company?

Accepted Answer

When you go directly to a carrier, you only see their rates. As an independent agency, we represent multiple A-rated carriers and can shop the market on your behalf. We're also not paid more to place you with one carrier over another — our job is to find you the best coverage at the best price, then stay with you as your business grows.

Question 15

What states do you write policies in?

Accepted Answer

We're licensed and actively writing policies in Illinois, Indiana, Ohio, Michigan, Wisconsin, Minnesota, Iowa, Missouri, Kansas, Nebraska, Kentucky, and Tennessee. If your business operates across state lines, we can often handle multi-state coverage under a single policy.

Question 16

What industries do you specialize in?

Accepted Answer

We work with a wide range of trades and industries including roofing, landscaping, general contracting, manufacturing, trucking and transportation, janitorial and cleaning services, staffing, and retail. If your industry involves physical labor or a mobile workforce, we likely have experience placing coverage for businesses like yours.

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