A Guide to Workers’ Compensation for Small Accounts
Of the many types of insurance coverage available for business owners, workers’ compensation insurance is one of the most important. This crucial insurance coverage helps to protect employees by paying for lost wages and medical expenses if those employees were to become injured on the job. In many states, some form of workers’ compensation insurance is mandated by legislation. Even in jurisdictions where it is not required, workers’ comp is a smart employee protection. Even small businesses can benefit from insurance coverage of this type; in this guide, we will explore the details that can help small business owners make informed decisions about workers’ compensation.
Workers’ Comp: The Basics
In the risk management strategy for business owners, workers’ compensation is a key component. Employers have a duty to create and to maintain a reasonably safe place for their employees to work, but accidents can and do occur. When a workplace accident causes an employee to become injured, workers’ comp serves to provide coverage for medical care expenses as well as paying the wages lost as a result of the injury. Depending on the policy, the insurance may pay for other expenses, including:
- Long-term care costs for workers disabled due to injury
- Survivor benefits/death benefits for family members of employees killed in workplace accidents
- Retraining costs for affected employees
In general, workers’ compensation is regulated at the state level. State statutes determine which types of injuries are covered, how care is provided, and may set a cap on the amount of benefits an injured employee may receive. Because this type of insurance may be required, failure to obtain it can leave the employer exposed for out-of-pocket expenses related to an employee’s medical care and lost wages; penalties imposed by the state may also contribute to excessive costs.
What Businesses Need Workers’ Compensation Insurance?
Even though states may require business owners to obtain workers’ comp, there are always exceptions. An employer may be exempt if the business has less than a set number of employees based on applicable regulations. Other types of employees, such as family members, seasonal/casual employees, or independent contractors, may not need to be covered by a policy. It is critical that business owners, regardless of size or type of business, become familiar with applicable laws governing workers’ compensation insurance. Even if it is not required, small business owners may opt to obtain coverage; this type of insurance can work as an employee benefit, attracting a talented workforce to the companies providing such coverage.
Workers’ comp may represent a significant expense for small business owners, and finding the right insurance policy at the right price may be a daunting task. Thankfully, there are numerous insurance brokerages extending this valuable coverage to small accounts. With the right workers’ compensation insurance in place, employers are able to protect their employees and their business assets from the expenses associated with injury claims.
About Caitlin Morgan
Caitlin Morgan specializes in insuring assisted living facilities and nursing homes and can assist you in providing insurance and risk management services for this niche market. Give us a call to learn more about our programs at 317.575.4440.