June 3, 2019
Blog Federal workers’ compensation laws cover over 135 million employees in the United States. In terms of salary, this means that these insurance policy cover over $7.2 trillion in payroll.
Why are so many workers covered by this type of compensation policy? It’s required in nearly every state. And, it’s beneficial to both employees and employers.
That’s right. Employers benefit from paying for insurance for their workers. From increased productivity to decreased legal fees, there are many benefits small businesses can reap from workers comp policies.
Business can receive financial penalties for not protecting their employees. Therefore, it’s important to understand how it works and what the benefits are.
1. Workers Comp is a Legal Requirement
This might be the biggest reason small businesses purchase workers compensation for their employees. However, different states have different requirements.
Texas is currently the only state that doesn’t require employers to purchase workers comp. However, even certain construction companies are still required to purchase coverage for their employees.
It’s important to check your state laws. Certain states only require businesses more than five employees to enroll in this type of insurance. Other states require that any business with employees takes out a worker’s comp policy regardless of size.
Even though this might seem like a corner you can cut as a small business, it’s important to understand the risk you’d be taking.
In New York, for example, the penalty for noncompliance can be up to $2,000 for every 10-day period your company goes without coverage. That’s a high price to pay for a small business who is struggling to stay afloat.
2. Insurance Helps Avoid Legal Issues
Providing your workers with workman’s comp is a way of avoiding costly legal fees that can drain a small business.
Aside from protecting them in the case of injury, it often serves as a legal agreement between you and your employees. Essentially, if an employee accepts workers compensation coverage, they are forfeiting their right to sue the company if they get hurt.
This means that, even if it weren’t required by law, it would be a great investment for companies in certain industries specifically.
Look at businesses that operate heavy machinery. In this case, workers comp is crucial in protecting the physical health of employees and the financial health of the company.
Employees don’t have to worry about their medical fees. The company doesn’t have to worry about covering any legal or medical fees on top of it all.
3. You Can Help Employees Succeed
Showing your employees that you care about their health and wellness can actually increase business productivity.
As an employer, it’s your job to take responsibility for what happens to your employees while they’re working. This means that, if they get injured or become ill while on the job, they know they’ll be okay.
They don’t have to worry about their medical bills and income. This allows them to focus on recovering and getting back to work more efficiently.
This is an added plus as an employer as well! Depending on the policy you have chosen, the insurance will cover the cost of paying their wages while they’re out of work.
This saves small businesses a lot of money while also protecting their employees’ health and well-being.
Simply put, providing workers with workman’s comp insurance is a great way to demonstrate how much you care about each individual in your company.
4. Employees Recover Faster with Aid
Workers comp is about more than just financial aid. Depending on the policy you choose, your employees could also receive rehabilitation services.
If a trusted employee becomes ill, then the policy will cover the costs of rehabilitation or additional training to help them get back to work.
Additionally, if an employee can’t return to the same job, the insurance will help them train for a new job that they can engage in.
All of this ties into the aspect of caring for your workers who help make your company what it is. However, it also ensures that your workers can recover faster and get back to being productive members of your business community.
Rehabilitation and recovery can actually be a really positive thing for you and your employees. Time spent off honing their professional skills can help them come back as stronger workers in the future.
The rehabilitation services provided by a compensation policy are there to ensure the workers are able to recover faster. They’re also there to help workers learn the skills they need to return to their job with efficiency and maximum productivity.
5. Benefits Attract Top Employees
Small businesses sometimes offer workman’s comp to employees simply to attract top talent.
Forbes even reported that one of the ways that businesses are attracting top talent in a competitive market is by offering healthcare benefits.
An insurance policy that protects workers in case of injury is a type of healthcare benefit because it allows them to save on health costs.
Even though it’s a requirement for most industries, the state doesn’t require all companies to have a workers comp policy. Those that do purchase one for their workers are ensuring that their company is attractive to more employees.
Benefits packages should make it clear that you care about the health of your workers. They should also detail exactly what they can expect to receive if they are ever injured on the job.
As a small business, this is important, especially if you are growing and want to retain the talent you attract.
Giving Your Employees What They Deserve
Employees deserve financial aid and medical care when an accident occurs. Providing them with workers comp insurance is the most effective way to ensure they get this care and attention.
The great news is that because it’s such a common form of business insurance, it’s not that expensive for a small business to receive total coverage.
To learn more and receive an instant quote for your company, contact us to get started today.
