Workers’ compensation is an important type of insurance for businesses of all sizes. It provides financial protection to employees who become injured or ill on the job. The benefits provided by workers’ compensation include medical coverage, lost wage recovery, and disability benefits.
In most states, workers’ compensation insurance is required for businesses with one or more employees – however, there are some exceptions, such as for sole proprietors and businesses that employ only family members. In some states, workers’ compensation is only required for businesses with at least three or five employees, so make sure you know your state’s laws.
Even if you are not required by law to have workers’ compensation insurance, the Minneapolis workers’ compensation attorneys at KSK Law recommend purchasing it. Workers’ compensation can protect your business from severe financial consequences if an employee is injured or becomes ill on the job. If your state requires you to carry workers’ compensation insurance and you don’t have it, you could face up to $100k in fines depending on your location.
How to Choose the Right Policy For Your Business
When deciding which workers’ compensation policy to purchase for your small business, there are a few factors to consider.
For starters, the size of your business will affect the cost of your insurance policy. The more employees you have the more expensive it will likely be, so this is good news for small business owners. Look for an insurance company that specializes in small business insurance.
It’s also important to consider how dangerous your business is. Some businesses, like construction companies, have a much higher risk of injury than standard office workers. Dangerous industries will require a higher insurance premium.
Other industries are also more prone to lawsuits than others, for example, medical malpractice lawsuits are common in the medical field. For these types of organizations, an insurance policy that provides protection from lawsuits is ideal.
What Benefits to Look for in a Workers’ Compensation Policy
When assessing different workers’ compensation insurance plans, it’s important to make sure your employees are covered for the usual benefits. Some of those important benefits are as follows.
- Medical Expenses: The policy should cover all of the employee’s medical expenses related to the work injury or illness.
- Lost Wages: The policy should replace a portion of the employee’s lost wages while they are recovering and unable to work.
- Disability Benefits: The policy should provide benefits to injured employees if they are permanently disabled as a result of the work injury or illness.
These are the most important benefits that you should look for in a policy. Most policies provide even more benefits, such as vocational rehabilitation if the employee cannot return to the same line of work.
How to Get a Workers’ Compensation Policy
Workers’ compensation policies can be purchased from any insurance company, private or state-run. Do some research on the private insurance companies you are considering to read reviews and get an idea of their reputation. You should also make sure the companies you look at are licensed and insured, which you can check through your state’s insurance department.
Insurance companies will provide free quotes, so it’s best to reach out to a few providers and compare rates. This will allow you to find an affordable policy and save money in the long run. In addition to comparing rates, there are a few things you can do to save money on workers’ compensation insurance.
For starters, you can take steps in the workplace to reduce the risk of accidents and illnesses. By providing safety training and implementing procedures, you can create a work environment that values safety. Additionally, you can explore pay-as-you-go policies. This type of insurance charges you a premium based on your payroll instead of a fixed amount. If you have a very small business with fluctuating payrolls, this is probably a good option for you. Some insurance companies even offer discounts to small businesses, so be sure to ask about that.
Summary
Workers’ compensation insurance is an important type of insurance for small businesses. It can protect your business from financial distress and lawsuits if an employee is injured or becomes ill on the job. When choosing a workers’ compensation policy, be sure to consider the size of your business, the nature of your business, and your industry. You should also look for a policy that covers all of your employees, provides the benefits that are important to you, and has a good reputation for working with small businesses.
Sharon Feldman is a writer based in San Diego, California with a focus on employee rights and workplace topics. When not writing, she can be found on the beach with her dog Noodles. Twitter
Work injury stock image by Gino Santa Maria/Shutterstock
