What Is Industrial Insurance?

Industrial Insurance (workers’ compensation) pays for approved medical, hospital, and related services that are necessary for an injured worker’s treatment and recovery. It also provides wage replacement for wounded workers who are unable to work for a period of time.

Employers in Washington State are obliged by law to have Industrial Insurance (workers’ compensation) for their employees. In exchange, if a work-related accident or illness happens, the employer is usually immune from being sued for damages.

Excluded employments

Certain categories of jobs are excluded from the Industrial Insurance mandate. Among the occupations that are not permitted are:

  • Directors and shareholders who are corporate officers. If you choose elective coverage for your executive officers, you must cover all of them.
  • Those who labor in or around a private residence if there are less than two people employed, as well as those who do gardening, maintenance, or repairs.
  • Individuals who perform services in exchange for financial assistance or food from a religious or charitable group.
  • Volunteers for municipal governments or private non-profit charitable organizations.

Self-insurance is a type of industrial insurance in which the employer is responsible for providing all necessary benefits to the injured employee. The program is overseen by the Department of Labor & Industries (L&I), which ensures that companies offer sufficient benefits. If your company meets the following criteria, you may be eligible for self-insurance:

  • Is profitable and able to issue a bond pledging sufficient funds to cover all insurance costs.

Who pays Washington L&I?

The Department of Labor and Industries (L&I) is a multi-faceted state department tasked with ensuring the safety, health, and security of Washington’s 3.3 million employees. We assist companies in meeting safety and health requirements, and we investigate workplaces when hazards are identified.

We are akin to a major insurance firm in that we administer the state’s workers’ compensation system, providing medical and limited wage-replacement coverage to workers who suffer work-related injuries and illnesses. Our rules and enforcement procedures also ensure that employees are paid what they are owed, that the working hours of minors and teenagers are regulated, and that consumers are protected from unsafe construction practices.

We have nearly 2,800 experienced employees, including safety inspectors, claims specialists, nurses, researchers, accountants, labor experts, and support staff, who service consumers in 19 offices across Washington.

Protecting the health and safety of workers

The Division of Occupational Safety and Health (DOSH) of the Department of Labor and Industries (L&I) is responsible for enforcing and enforcing the Washington Industrial Safety and Health Act (WISHA) statute, which protects workers against hazardous working conditions.

Every year, our inspectors visit around 5,000 sites and issue citations to companies that breach health and safety regulations. We also provide approximately 2,500 free on-site safety and health consultations each year to businesses who want our assistance in complying with these laws in their specific workplaces. We also perform occupational health and safety research, which focuses on improving healthy work conditions and preventing injuries and diseases in the workplace.

Ensuring medical care and financial help for injured workers

Our claim supervisors are in charge of overseeing benefits for employees who have been injured or become ill on the job. They also collaborate with doctors, employers, and counselors to assist seriously injured workers in returning to paid work.

Employer and employee premiums, as well as investment revenue, are used to pay Washington’s workers’ compensation system. About 400 major, self-insured employers who have qualified to furnish their own workers’ compensation insurance are also regulated by us.

Protecting workers’ wages, hours, breaks, and more

We enforce labor regulations that safeguard workers’ salaries and working conditions, as well as child labor laws. Our organization is also in charge of overseeing apprenticeship programs and enforcing prevailing pay standards on public-works building projects.

Protecting the public from unsafe work and economic hardship

Electrical work, boilers, elevators, and manufactured homes are all inspected by our technical experts to keep the public safe. We also certify plumbers, test and license electricians, and give amusement ride operating permits.

Construction contractors must be registered with our agency and be insured and bonded. We also offer a user-friendly website that allows customers to check if a contractor is bonded and insured, as well as warn them about the dangers of hiring unregistered contractors.

Which insurance is popular among industrial workers?

A Workmen Compensation insurance policy is a commercial insurance policy that covers an employer’s legal obligation to compensate its employees in the event of their death or injury. This insurance, also known as employee compensation insurance or labor insurance, allows an employer to demonstrate his ability to meet the Workmen Compensation Act’s duties.

What is industrial all risk policy?

Industrial All Risks Insurance provides a broader range of coverage than typical “Fire and Special Peril Insurance.” It’s an all-risk policy that covers everything from fire and allied risks to burglary, accidental damage, breakdown, and business interruption.

What is the cost of living increase for 2022 in Washington state?

This is a considerable boost in benefits for wounded workers, which is much needed. The change in the average weekly wage in Washington State determines the annual L&I COLA rise (AWW).

Because many low-paying employment were lost in Washington State as a result of the epidemic, the Average Weekly Wage is higher than usual this year. Last year, the average wage was higher because there were fewer low-paying positions that were covered by unemployment insurance.

Enjoy this year’s rise, but don’t expect something similar in the next two years. When the economy recovers from the loss of low-paying jobs, the AWW will fall.

About risk classifications

Businesses are classified by L&I based on their level of hazard or risk. There are about 300 classes in our system. The idea is for employers to pay premiums depending on the risk of injury to their employees. Those in hazardous sectors, such as logging, typically pay greater insurance premiums than employers who operate retail stores.

Calculating premium rates

Here’s how L&I figures out the premium rate for each of the company’s risk categories:

  • Multiplying the business’s experience factor by the sum of the Accident Fund, Medical Aid Fund, and Stay at Work base rates, and then multiplying it by the sum of the base rates for the Accident Fund, Medical Aid Fund, and Stay at Work.


Here’s an example of a premium rate calculation for one risk classification for a particular business.

If the company is assigned more than one risk classification, the calculation would be the same for each one.

Annual rate notices

Each L&I-insured business receives an annual rate notice in December that summarizes insurance coverage beginning in January.

You should send a copy of your rate notification to your payroll service if you use one.

What are the two essential types of insurance plans?

The government provides public health insurance, such as Medicare, whereas private health insurance includes policies obtained through an employer or the marketplace.

Health insurance can also be classified by the kind of plan, such as PPO, HMO, EPO, or POS.

Short-term health insurance plans don’t cover all of your medical needs and aren’t regarded major medical insurance.

What is EC policy?

Legal duty to pay compensation for personal injury by accident or disease arising out of and in the course of the insured’s employment in the Business, if the Insured is liable to pay compensation for such harm either under the Law(s) set out in the Schedule or at common law.