Worker Compensation Insurance

What is Workers’ Compensation Insurance?

As a faith-based organization, your mission is to care for the physical and spiritual needs of those entrusted to your care. However, your ministry should extend beyond outreach. Creating a safe and healthy work environment is not only a legal obligation, but it’s also a ministry in itself. By prioritizing the protection and care of your employees, you model Christ’s love and compassion by caring for the entire flock.

Workers’ Compensation Insurance provides benefits for employees in relation to work-related injuries or diseases specified by state law, including:

• Medical benefits.
• Disability benefits.
• Rehabilitation benefits.
• Death benefits.

While Workers Compensation is not a replacement for a safe work environment, it is an integral piece of your ministry’s risk management program.

How is Workers’ Compensation premium calculated?

Workers’ Compensation premiums are calculated based on a few different factors, including:

Total payroll 

The more employees you have and the higher their salaries, the higher your premium will be. Your payroll records are the basis of premium calculation, including cash allowances such as utilities, housing, or education, and reimbursed Social Security.

Employee classification 

Different types of jobs come with different levels of risk, and jobs with a higher risk of injury or illness will have a higher premium. Different types of work will require different employee classification codes, which help determine the level of risk faced by your staff. It’s important to review questions about classification with a specialist, because failure to classify properly can result in fines and penalties.

Experience Modification Factor (X-Mod)

Your X-Mod is a number that reflects your ministry’s claims history compared to the average for other organizations in your industry and of your size. If your organization suffers a higher than average number of Workers’ Compensation claims, your premium will be higher. Implementing procedures to maintain a safe work environment is the best way to reduce your X-Mod in the long term, and thus your premium.

What is a Workers Comp Audit?

The premium you are charged for your annual Workers Compensation policy is based on an estimate of future payroll. When the year is over, and your payroll figures are finalized, your carrier will perform an audit where your estimated payroll is compared against your actual payroll.

If you overestimated payroll, your carrier will issue you a refund for the overpayment on your workers compensation. However, if you underestimated payroll, your carrier will charge additional premium to make up the difference.

Reducing the impact of an audit

As you can imagine, an audit that results in a premium charge can create financial complications for ministry budgets. By bundling your workers compensation with MinistryWorks by Brotherhood Mutual, your ministry can access pay-as-you-go insurance premium. MinistryWorks’ payroll services can dramatically reduce the severity of your annual Workers Compensation audit.  

What are some examples of Workers’ Compensation claims?

There are many scenarios Workers Compensation insurance can respond to. The following are example claims that we’ve seen ministries like yours face. While every situation is unique, these scenarios help illustrate the types of risks that this coverage can protect against. These scenarios are intended to be educational, and the specifics of your coverage will depend upon your insurance policy.

• “A youth pastor working at a summer camp is helping to set up a large tent. As he’s lifting one of the tent poles, he injures his back and is unable to continue working. He needs medical treatment and several weeks of physical therapy to fully recover.”
• “During a church renovation project, a construction worker falls from a ladder and breaks his leg. He needs surgery and several months of physical therapy to fully recover.”
• “A janitor at a Christian school slips on a wet floor and breaks his arm. He needs surgery and several weeks of physical therapy to fully recover.”

Next Steps

In conclusion, Workers Compensation insurance is an essential coverage for properly protecting your team.

Worried about the cost? A ChurchWest Ministry Insurance Advisor can bundle your Workers Compensation insurance with other ministry-specific coverages as part of a comprehensive insurance package. By bundling your coverage with ChurchWest, you can get the best protection at the most affordable price.

Click the “Get a Quote” button at the top of this screen to contact your local advisor, or explore our other coverage pages to learn more about guarding your ministry’s finances and reputation.