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Small Business Insurance Simplified
Workers Compensation Insurance
Workers Compensation Insurance Protection
 Workers compensation insurance in one form or another is a statutory requirement all over the country.
While the specific nature of the type of insurance to be provided by the employer varies from state to state, as does the eligibility, (some states mandate that only companies that employ more than a specified number of people need this insurance), very few businesses can function without it.
Legal Obligations
Every business has a legal obligation to protect their employees and make the workplace as safe as can reasonably be expected. However, accidents can and do happen, perhaps indirectly, in the course of work. Even if it happens outside the workplace - say doing repair work at a customer's premises, it is the employer who will be responsible for any injury to the worker.
Also, it is possible that workers may be exposed to various diseases or sicknesses in the course of their work - an influenza outbreak does not mean a delivery person can stop doing their rounds - and providing treatment and compensating the worker for lost wages will become necessary.
Worst Case Scenario
In the worst case scenario, if someone should be killed in the course of their work, death benefits have to be provided to the surviving dependent family members.
Modern business thinking regards all employees as assets of the company. Whether it is physical labor or writing software, their efforts are what provide the company with its profits.
It makes sense for an employer to make sure that all the employees are protected to the maximum against injury or sickness. The best way to do this is with workers compensation insurance.
A worker has to be compensated for lost wages while unable to work, as well as for all medical expenses, irrespective of who was at fault in causing the injury or sickness.
If You Have No Workers Compensation Insurance
If there is no workers compensation insurance, the money will have to be paid by the employer. If a worker is permanently disabled or is killed, the amount could be huge. And in the case of industrial accidents, often more than one worker is injured at the same time.
Not only can this be a huge burden for a company to bear, it may even hurt the company to such an extent where its survival is in doubt.
Workers who are not provided with workers compensation insurance by their employers may sue their employers for damages in connection with the injury or sickness that happen while on the job.
In these cases, the courts may award damages that can break an employer financially.
Benefits of Having Workers Compensation Insurance
Not only is having workers compensation insurance a legal necessity, it makes a great deal of business sense. In fact, having a high level of workers compensation insurance for employees is a great morale booster.
Employees will feel more secure in doing their work, especially if there is even the slightest amount of risk involved, if they know that they are protected against any injury or sickness acquired while at work.
Many companies that are exempt from workers compensation insurance because they do not have the minimum number of employees take up a policy anyway. This is because it provides security against financial claims and also does so much good for employees' morale.
It is also a good retention strategy since it demonstrates to the employees that the company cares about them enough to take measures to protect them even when it is not legally required.
Workers Compensation Insurance Needs A Separate Policy
Workers compensation insurance needs to be taken as a separate policy by the company. Many business insurance policies are package policies that cover a variety of contingencies, but workers compensation is always a stand alone policy that must be taken separately.
Since the type of work done by each employee and the dangers involved affect the overall premium, businesses should ensure that all their workers are properly categorized so that they do not needlessly pay extra premiums.
What's Next
Next In This Guide
Part 7:
 Commercial Auto Insurance: What you need to know about commercial auto insurance. If you use your personal vehicle for business, then STOP and read this.
Previous In This guide
Part 5:
 Small Business Health Insurance: Whether you have one employee or 100, it makes sense to provide everyone with health insurance. Here's why.
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