Worker safety should be a priority for any business owner. Providing safe and healthy working conditions for employees is beneficial both to the employee and the employer.
But even when employers provide a safe workplace, accidents still happen. Without worker’s compensation, your business could be in serious legal trouble in the event an employee gets injured.
The fine for operating a business without worker’s comp can be tens of thousands of dollars. It varies by state. In addition to fines, you’ll also face paying for the employee’s medical care and lost wages out of pocket.
Want to avoid having your business shut down? Then you need to know what worker’s compensation insurance covers and why it is a requirement in most states.
What Is Worker’s Compensation
Worker’s compensation, or worker’s comp, is business insurance. It covers the medical and wage benefits owed to workers who become injured or ill as a result of their working conditions.
In most states, employers acquire worker’s compensation through a worker’s comp insurance provider. Worker’s comp requirements vary by state. Almost every state requires that employers have worker’s compensation.
Worker’s comp protects both the employee and the employer. There are different protections for each group.
Worker’s compensation protects employees. It covers medical expenses for any injury they sustain while performing their job. It also pays for any lost wages the employee incurs during the time they are too injured to work.
In addition, worker’s compensation pays lost wages to the families of employees. This happens in the event an employee dies as a result of performing their job.
Worker’s compensation protects employers, too. It prevents employees from suing the employer over injuries sustained in the workplace.
Worker’s comp protects employers from having to pay state fines or injury expenses out of pocket.
Having worker’s compensation also protects businesses from getting shut down. The state can require a business to close due to failing to provide worker’s comp insurance.
What Does Worker’s Comp Cover?
Worker’s compensation covers injuries and illnesses that occur suddenly. It also covers illnesses and injuries that result from long-term working conditions.
It is not necessary that the injury occur at the location where the employee works. It only matters that the injury happened while the employee was conducting business for the employer.
It is not important who is at fault for the injury. It is only important that the injury occurred due to the work the employee performs.
Employees qualify for worker’s comp when their injury, illness, or disability resulted from a work-related situation.
Conditions covered by worker’s compensation include, but are not limited to, the following:
- A workplace fall
- Bodily injury caused by workplace machinery
- Long-term injuries resulting from repetitive movement
- Respiratory conditions resulting from inhaling chemicals
- Road accidents that occur while an employee is performing work-related errands
There are also exceptions where workplace injuries aren’t covered by worker’s comp. For example, if an employee were intoxicated at the time of injury.
In addition, an employee may not be covered if they were breaking the law at the time of injury. Nor if they did something with the intention of injuring themself.
There are many precautions employers can take to ensure worker safety. Workplace safety tips can help. Taking the time to train and educate employees on workplace safety is a great place to start.
Employers can also encourage employees to take breaks. Working long hours can lead to exhaustion which increases the risk of injury.
It is imperative that employers are aware of the Occupational Safety and Health Act of 1970. OHSA requires employers to provide safe workplaces. OSHA has recently updated its policies due to increased health risks.
What Are the Benefits of Worker’s Compensation for Businesses?
The benefits of having worker’s compensation business insurance for employees is pretty clear. It covers their medical costs and wage benefits in the event of a workplace injury.
For employers, worker’s comp offers protection from having to pay those costs out of pocket. But there are many benefits to employers that aren’t immediately obvious.
Covers Legal Liability
Worker’s comp insurance began as a bargaining position between employees and employers. Did you know employers used to pay all of the legal costs resulting from a workplace injury?
Today, those costs could destroy a business entirely. Worker’s compensation provides legal liability coverage. It would otherwise be the responsibility of the employer if an employee became injured or ill.
Cover Vocational Rehabilitation
Worker’s comp covers the cost of retraining employees who are unable to perform the type of work that caused their illness or injury.
Worker’s comp covers the cost of vocational rehabilitation. Employees can need vocational rehabilitation for different reasons.
In some cases, the employee requires training for a new position within the company. In other situations, the employee may need training to get a job at another company.
Covers Work-Related Illnesses
Occupational illness has significant negative effects on employee’s quality of life. It also affects their productivity. Worker’s compensation covers work-related illnesses like asthma and bronchitis.
It enables employees to have their medical expenses taken care of so they can manage their condition and heal properly. In many cases, this means returning the employee to work quickly or eliminating the need to hire a new worker.
Covers Compensation Due to Lost Wages
Worker’s comp covers partial and total employee disability costs. This includes the employee’s loss of wages if they are unable to return to work right away or over a longer period of time.
Worker’s compensation insurance saves the employer from having to cover the cost of those lost wages.
What Are the Consequences When a Business Does Not Have Worker’s Compensation
Almost all states in the US require employers to carry worker’s compensation insulation. Failure to comply with worker’s comp state laws can mean a business owner will have to pay fines and suffer penalties.
For example, an employer may have to pay a daily fine the first time they are cited for failing to provide worker’s comp. Daily fines for repeat violators may increase and can cost hundreds of dollars.
Sometimes there is an additional penalty of a percentage of the employee’s benefits. Finally, the state may mandate that the business shut down either temporarily or permanently.
Worker’s Compensation Can Help You Avoid Legal Trouble
Purchasing worker’s compensation insurance can save your business from legal trouble. This includes medical expenses and lost wages for injured workers.
Worker’s comp will ensure your business avoids fines, penalties, or getting shut down.
Are you a business owner and haven’t purchased worker’s compensation insurance? If so, you are subjecting your business and your employees to daily risk.
Protect your workers, your business, and yourself by contacting us about worker’s compensation insurance today.