Owning a small business or planning to own one? You’ve probably researched various types of insurance for small businesses. Workers’ Compensation Insurance (also called workers’ compensation or workman’s compensation) is one of the most important types of insurance you need to consider. But is it really that important? Do I really need it?
Except for the State of Texas, every state requires Workers’ Compensation Insurance. Even though many business owners may believe they don’t need it, the answer is yes, you need Workers’ Comp even if you have only one employee. Depending on where your business is located, it may even be required by law. If your company lacks the required Workers’ Compensation Coverage, you may be subject to fines, penalties, and even imprisonment by your employees.
It’s your job and responsibility to keep your employees safe at work. Safety measures can be implemented to mitigate the risks that your employees may face on the job. However, no risk can be completely eliminated. In cases of employee injury or illness on the job, Workers’ Compensation Insurance helps protect your business and helps cover your employees. In addition to that, it can provide considerable financial relief to an afflicted employee during such times.
In this article, we’ll take a deeper look at what Workers’ Compensation Insurance is, its benefits and how they operate.
Let's Begin With: What Is Workers' Comp?
Available in the US since 1949, Workers’ Compensation is an insurance program that provides benefits to employers when employees suffer work-related injuries or illnesses. It also provides medical coverage and wage replacement benefits. To make sure you and your employees are covered if you are injured on the job, you should carry Workers’ Compensation Insurance. This is an important step employers can take to protect their workforce.
A Workers’ Compensation Claim is typically filed by an injured employee when an accident occurs on the job. If you have coverage through an insurance company, your employee can file a claim. When your Workers’ Compensation Policy is approved, it will reimburse injured workers for their medical expenses, as well as the wages they miss while recovering.
What Benefits Have Workers' Comp Insurance?
Most US states require business owners to have Workers’ Compensation Insurance. However, even when it’s not required by law, there are still reasons why you might want to consider buying Workers’ Compensation Policy:
- Keeping your employees safe on the job is your responsibility. But accidents do happen and that’s where Workers’ Comp Insurance comes into play. If your employee is injured on the job, they can claim medical benefits and lost wages under Workers’ Comp Insurance.
- When an employee files a claim through the Workers’ Compensation Policy, they give up the right to sue the business or make other claims regarding the injury or illness. Under a Workers’ Comp, your business is protected from costly and time-consuming legal battles that can also delay its productivity.
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