Workers’ Compensation: Protecting Your Dealership Against On-the-Job Accidents
No matter the size of your dealership or the types of vehicles showcased, you have exposure to unique challenges that other business owners might not face. Maintaining a safe working environment and shielding yourself against liability claims are important and necessary goals for your dealership.
Even with effective and efficient precautions, you cannot protect your employees from every accident or incident. From slipping on a slick service floor to being clipped by a vehicle on a test drive, a significant injury can financially crush a dealership.
Workers’ Compensation Insurance for Car Dealers
Workers’ compensation provides reliable insurance coverage and shields your dealership from bearing the entire cost of a claim if an employee suffers an injury while on the job. It covers medical expenses, hospital visits, and drug prescriptions associated with the accident. Beyond medical treatment costs, workers’ compensation also provides wage replacement benefits for lost wages and can reduce legal expenses. Additionally, if the employee dies due to a qualifying condition, the family could be eligible for financial death benefits.
Employer’s Liability
Almost always included in a workers’ compensation policy, employer’s liability insurance offers protection when an employee blames your dealership’s negligence for their injury or illness and decides to sue. Employer’s liability insurance can help cover attorney fees, court costs, and settlements. Even if a lawsuit is frivolous, you could end up paying out of pocket for a costly legal defense. That is where the employer’s liability insurance comes into play.
Required by Law
Workers’ compensation is not only necessary by law in most states, but it is beneficial to the overall costs and stability of your dealership. Every state has its own unique workers’ compensation policies, laws, and requirements. But the bottom line is that without it, you could suffer severe penalties.
Typically, dealerships must purchase workers’ compensation insurance through a monopolistic state fund. If you obtain coverage through a monopolistic state fund, it might not include the employer’s liability insurance. You can, however, acquire it from a private insurer to fill this gap in coverage.
Workers’ Compensation and COVID-19
The COVID-19 pandemic has presented countless challenges for state policymakers across the country. Among those is the role that workers’ compensation insurance plays in helping employees infected with the disease.
Generally, workers’ compensation does not cover community-spread illnesses. According to the National Conference of State Legislatures, some states have considered exceptions for certain employees who develop chronic diseases resulting from repeated exposure to harmful materials and environments. The COVID-19 pandemic presents a unique circumstance where jobs that were not considered hazardous have suddenly become dangerous for employees. It is unclear if existing policies will now include COVID-19.
Risk Management Strategy
Implementing a risk management strategy can lower your Workers’ Compensation costs. For example, you can make your dealership safer with employee safety training, proper equipment, and regular equipment maintenance. You can also mitigate risk by implementing an accident reporting plan as your primary defense when managing your dealership’s workers’ compensation claims frequency and severity. Injuries, even minor ones, must be reported as soon as possible. Untreated and unresolved incidents may turn into large claims later.
Through a safe work environment and solid risk management strategy, you can reduce the likelihood of an injury. That means fewer claims – and a lower insurance premium. To achieve this, understand the market trends and get creative. Seek options such as dividend plans, paid loss retros, large deductible plans, or explore captives.
Protecting Your Dealership
Worker’s Compensation is a large part of protecting your employees. For your dealership to be financially successful, it is critical to have the proper protection and fill in any risk exposure gaps. At Dealer Risk Services, we will help you navigate the steps to control costs and put you in the driver’s seat with your Workers’ Compensation program. Now is the time to review all policies and act!
