Workers’ Compensation Insurance for Crop Farming - Why Should Farm Owners Get
Agricultural businesses have long been ambiguous with the concept of workers’
compensation insurance. But, it needs to be clear that though several states give an for worker’s compensation for the agriculture industry, common law of workers’ compensation insurance is established in every state. So, qualifying farmers don’t have the option as to whether or not to purchase this coverage.
What Is Workers’ Compensation Insurance?
The workers’ compensation system entitles every employee to guaranteed compensation
(which is a pre-fixed statutory amount) due to injuries and losses at work, regardless of fault. The employer bears his or her part of the cost through participation in a scheme of insurance. When the employers have this in place, it keeps them safe from any kind of legal claim against them by an employee(s) due to work-related injuries.
The Need for Worker’s Compensation Insurance for Crop Farming Employees
Farming involves hazardous situations for crop workers just like the construction or mining
industry. Many accidents take place during agricultural work. Farm workers are exposed to several dangers of physical nature and accidents during agriculture work. It is estimated that 33 % of farm workers in the United States undergo a non-fatal injury. That’s why it’s imperative to give crop workers reasonable compensation and help for costs due to an on the-job illness or injury or illness. Employees get an option to file the workers’
Injuries Farm Workers Are Prone To In the Agricultural Sector
Agriculture industry workers are prone to several kinds of physical injuries. We can broadly classify these injuries into:
50% of agriculture worker fatalities are due to motor vehicle accidents through ATV and
harvester incidents or tractor rollovers.
Excessive heat exposure gives rise to various illnesses in crop workers such as dehydration, heat cramps, heat rash, exhaustion, and heat stroke.
Slip and Falls:
The Bureau of Labor Statistics reports that about 50 per 10,000 workers get injured due to
falls and slips, which surpasses transportation and mining industry stats.
Crop workers are liable to get injured while working with hoes, knives, and power-cutting
tools. During feed manufacturing, they may also face suffocation risks in silos and grain bins. Apart from this, they are exposed to:
• Musculoskeletal injuries due to strain.
• Dust and explosions.
• Chemicals and pesticides.
• Respiratory distress due to foul air in animal confinement.
The Consequences of Not Having Workers' Compensation Insurance
Owners of small businesses are constantly seeking ways to minimize costs and enhance their bottom line. Nevertheless, one area where they should not cut corners is workers’ compensation insurance.
Many business owners may consider workers’ compensation insurance to be an unnecessary expense, especially if none of their employees have suffered a significant work-related injury. However, business owners who do not have workers’ compensation coverage may face penalties or even jail time, depending on their state’s laws.
Since obtaining workers’ compensation is required in all states except Texas, businesses that do not operate in Texas and do not purchase this coverage may face severe fines and sanctions. The degree of sanctions for noncompliance varies by state. However, various factors will determine how much you will have to pay in fines for noncompliance, such as:
– Why you’re not in compliance: In a scenario where you purposefully omit or
misrepresent information such as the types of work your employees perform and the
number of individuals you employ, you’re likely to pay a lot more than if your
noncompliance was accidental or inadvertent.
– How long you haven’t complied: Most states will charge you a fee for each day your
firm is not in compliance.
– Size of your staff: Again, this varies by state and is not a rule of thumb, but the smaller
your company and the fewer employees you have, the lower your fines for
noncompliance will typically be.
Why Should Employers Go for Workplace Compensation Insurance?
Common law states that if the employer agrees to pay their part in workplace injuries,
regardless of fault, the employee would give up the right to claim against the employer if they get injured in the workplace. Typically, employers pay for compensation which is limited to:
• Medical expenses.
• Wage loss.
States have their distinct laws and provisions associated with situations related to crop
workers’ workplace compensation. But, employees can sue the employer in case of workplace injury under the common workers’ compensation law. However, if the employer is compliant with the worker’s compensation law, it keeps him on the safe side to be sued for the same by a worker.
On the flip side, non-compliant employers won’t get the common law defenses. They are prone to a problem such as:
• Personally paying the cost of wage losses or medical expenses for the injured
• Injured employee(s) may file negligence lawsuits.
• States penalties for non-compliance: Based on the level of the infraction, the noncomplying employer may get charged with a felony or a misdemeanor.
Workers' Compensation Required Limits
The limits on a workers’ compensation insurance policy include employee benefits and employer liability. The employee benefits portion of the policy covers medical expenses, rehabilitation expenses, lost wages, and death benefits to the employee’s dependents. Employee benefits do not usually have limits or exclusions.
Employers’ liability limits are defined within each insurance policy. Business owners may choose to increase the limits for coverage. Each state sets the minimum required coverage limits. Legal, statutory liability limits in most states are:
– $100,000 per occurrence for bodily injuries
– $100,000 per employee for bodily injury by occupational disease
– $500,000 policy limit for bodily injuries by disease
At UnderWrite Insurance Services, we offer one million dollars insurance policies as well.
The Benefits of A Workers' Compensation Policy
In the incidence of workplace injury, an agriculture industry employee who files for workers’ compensation claims can get a payment that covers medical and wage loss expenses when the claim is approved. Typically, crop workers’ compensation includes cost coverage for:
• Medical care
• A portion of wage loss
• Retraining or rehabilitation costs
• Compensation for permanent injuries
• Benefits to survivors or dependent
• Death expenses
The Common Workers' Compensation Class Code(s) Used
A class code is assigned by the National Council of Compensation Insurance (NCCI) or by state agencies based on the activities of the occupation.
There are many different workers’ comp class codes within the crop farming segment. Below is the class code(s) used:
Code 0037: Field Crops & Drivers; Farm Machinery Operation–By Contractor & Drivers
Code 0191: General Farms, Primarily Crop
Code 0761: Farm Labor Contractors
Code 0762: Farm Management Services
The Cost of A Workers' Compensation Policy
The cost of coverage will depend on where your employees are situated because each state has different requirements for workers’ compensation insurance. Due to the heightened risk of workplace injuries, organizations with more employees may pay higher rates for workers’ compensation insurance.
You pay a certain amount of workers’ compensation for each $100 of your company’s total
payroll. Your workers’ compensation premium is determined by the categorization rate of the sort of job your employees undertake, your experience modifier (claims history), and your payroll (per $100).
UnderWrite Insurance Services is a national insurance agency that provides A-rated workers’ compensation insurance to cover Crop Farming employees. For a free insurance quote, submit an application below or give us a call at 201-580-6806.