Workers' Compensation Insurance
The bargain
Workers' compensation is a no-fault statutory benefit system. Employees give up the right to sue the employer in tort (the exclusive remedy) and receive medical care and indemnity benefits for work-related injury or disease. South Carolina employers with four or more employees (counting regular part-time workers) must carry coverage; the South Carolina Workers' Compensation Commission administers claims. Sole proprietors, partners, and corporate officers are treated differently - many may elect in or out of coverage.
Benefits
Medical care with no dollar cap; temporary total and temporary partial disability; permanent partial disability, either scheduled (loss of a limb, vision, hearing) or unscheduled; permanent total; and death benefits to dependents, including burial expense. Indemnity is generally two-thirds of the average weekly wage, subject to a state maximum that is adjusted each year. South Carolina does not pay indemnity for the first seven days of disability unless the disability extends beyond the statutory period.
Policy structure
Part One – workers compensation (statutory benefits); Part Two – employers liability (suits outside the statutory system, commonly $100,000/$500,000/$100,000); Part Three – other states coverage.
Premium
Class codes applied to each $100 of payroll, multiplied by the experience modification factor, then adjusted by audit and minimum premium.
Traps
Assuming independent contractors are covered; forgetting that the experience modifier reflects past losses; missing that employers liability is a separate part with its own limits.
Rule of thumb
Payroll × rate ÷ 100 × experience modifier = estimated premium. A $500,000 payroll at $3.00 per $100 with a 0.90 modifier yields $13,500.