You run a small business, but do you need all the extra products that the big guys have? Here’s what you need to know about workers compensation insurance.
Each year more than four million people are injured from working on the job. If an employee’s normal day of the same routine quickly takes a turn for the worse, will your small business be legally protected?
Workers’ compensation is like any other form of insurance. You hope you’ll never have to use it and may even think your small business doesn’t need it. With most of us spending forty or more hours per week at work, however, it’s not a risk worth taking.
No workplace is immune from accidents. Even if your company’s operations don’t involve intensive labor you’re still obligated as a business owner to protect yourself. Keep reading to learn more about the importance of workers’ compensation insurance for your small business.
Rules and Regulations
It can be easy for formalities to get lost in the shuffle when operating a business. Workers’ comp, however, isn’t an optional benefit like vacation time or a 401(k). Neglecting to purchase this insurance policy can be against the law and may be subject to fines or imprisonment.
The requirements of workers’ comp insurance for your business varies by state. For example, workman’s comp laws in South Carolina don’t apply until after an employee has worked a full seven days. Generally any company with more than one employee in a standard work setting is required to have it.
Certain factors such as contracted work, sole proprietors, or annual revenues may exempt employers. Workplaces such as agriculture settings may not need workers’ comp insurance, either. It’s your responsibility, however, to know if your business requires it.
Coverage Workers’ Compensation Insurance Provides
Whether it’s falling in the parking lot or getting hurt from a task, workers’ compensation insurance protects you from accidents that aren’t your fault. The areas it typically covers are medical, disability, rehabilitation, and death.
Each state’s coverage requirements differ, but it’s in your best interest as a business owner to purchase a policy with wide coverage. Be mindful of the various expenses your company could otherwise be obligated to pay in the event of a workplace accident.
Costs from hospital bills, recovery services, or even funeral expenses could add up to several thousands of dollars. This is all in addition to lost wages if an injured employee misses extended time from work due to an injury.
Exploring Options To Protect Your Business
The cost of workers’ compensation insurance is dependent on various factors. This includes the total number of employees, a company’s industry, and state requirements. It’s better to pay for a policy than deal with the unforeseen costs of a lawsuit or medical expense.
As a business owner you likely already have an insurance policy that protects you against lawsuits. This is usually broken up between general and professional liability coverage. You can either purchase a workers’ compensation insurance policy through your provider or explore state-funded options.
Running a small business can take up much of your time and energy. Fortunately, we can help. Check out the rest of our tips and advice in our business section to keep up with our latest trending content.
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