If you’re starting a business, you may not know much about workers’ compensation other than the fact that many businesses maintain a policy to protect their employees in the event of an accident.
Choosing the right policy and guaranteeing coverage for your employees requires a more in-depth knowledge of the issues. Employers need to have a sharp understanding of what workers’ compensation is and how it can protect them in the event of an injury.
1. Most states require employers to have a workers’ compensation policy
The requirement for workers’ comp insurance is fairly universal, but check with your state on the special rules or guidelines that might dictate the type of policy you get. In some states, it may not be required if you have fewer than a certain number of employees; other states require you to carry it even if you’re just a business of one.
If you don’t comply with these coverage mandates, you could end up paying a hefty fine or even facing jail. Do your homework to avoid such a drastic event.
2. It could protect you from lawsuits
If you don’t lawsuits when starting a business, perhaps you should. A well-aimed suit can incapacitate your business, and if you don’t have a good workers’ compensation policy, you may deserve what happens to you.
In the old days, the only way to receive compensation for injuries on the job was by suing your employer. Workers’ compensation coverage did not exist until about 1884. When the system started, employees waived their right to a lawsuit in order to qualify for insurance benefits.
A good workers’ compensation policy won’t make you immune to lawsuits, but it helps. You’re less likely to suffer the impact of a well-founded claim.
3. Insurance premiums vary by state and type of work
If you research state guidelines for workers’ compensation, you might notice that certain states have more affordable policies than others. Depending on the cost of living and market conditions, the cost for your premiums will vary.
They also depend on the kind of business you own. A high-risk business, such as a factory, will entail higher rates than on operation that poses low risks for employees, like a dentist’s office.
If you go into a business where it’s easy for people to get hurt, you’ll have to pay extra for coverage.
4. Workers’ compensation claims may cover medical bills, lost wages, and more
Depending on where you live and the policy you take out, workers’ compensation policies will differ. In most cases, they’ll cover medical bills, prescriptions, and care for an employee who is injured on the job.
However, those are not the only bills that they can cover. A policy might also pay your employees for lost wages if the injury puts them out of work for a period of time. It might cover other living expenses as well.
Research all the possible benefits to make sure you offer your workers a good package.
5. Claims are not always big events
You might expect to see high-profile claims like a severed finger or a broken bone. However, the majority of workers’ compensation claims are less dramatic, which is good news for you, the policy holder. The less spectacular the claims, the less you’ll pay for your premium.
Overexertion, twisted ankles, slips or falls, object impact, and machinery accidents are the most common injuries under workers’ compensation. You can reduce the number of claims you substantially by offering training courses and even by hiring a risk manager to handle this often-stressful facet of running a company.
Workers’ compensation is a very good thing for your new business. By amassing as much knowledge as you can, you’ll get yourself better protection. Do thorough research and consult a reputable agent when you take out your claim.