As a business owner, you know you have many responsibilities to maintain your business. You need to handle the actual business side of things and take care of your customers.
You also need to handle your employees, whether it’s training, payroll, scheduling, or insurance. If you are on top of things, you already know there are so many insurance decisions to make and monitor.
If you’re a small business, keeping track of all these insurance needs can be overwhelming. One of the kinds of insurance you are likely required to have is workers comp insurance.
Read on for all the things you need to know about workers comp for your small business.
What Is Workers Comp Insurance?
Workers’ compensation insurance is a type of insurance purchased by the employer to cover possible injury or illness of the employees.
As a business owner, you have a responsibility to maintain a safe work environment as much as it’s possible for your employees. Yet, some work comes with inherent danger. And sometimes, accidents happen.
The insurance policy provides medical benefits for the employee when they become ill or injured and therefore protects the business from the expense.
Workers’ comp insurance becomes important for both the employee who gets coverage and the employer who gets protected from the potential costs. Workers can get benefits in a number of ways from the insurance too. More on this later.
Why Should a Business Get Workers Comp Insurance?
In most states, businesses are required to have workers’ comp insurance. More on state requirements later.
The most important reason to get this coverage is so your business is protected. If an employee’s injured on the job, the liability and expenses could shutter a small business. If there is a serious injury, just the medical bills could overwhelm many small businesses.
The workers’ comp insurance protects the workers so they know they will get medical care paid for and still protects the business from having to absorb those costs.
State Requirements for Workers Comp Insurance
It is for this reason, most states across the US require businesses to have some form of workers’ comp insurance. The requirements and amounts vary from state to state.
Not only will the requirements to get insurance vary, but how much coverage also varies. Requirements will depend on a number of factors. Some states, for example, don’t require insurance if your business has only a few employees.
If you run a business where employees face a greater inherent risk by doing their job, your state might require you to have the workers’ comp insurance.
Generally, the factors by the state include:
- Number of workers employed who would be eligible for coverage
- Type of business
- Type of work done by the employees and the associated danger
Still, other states require all businesses to have some form of workers comp insurance. It’s important to know your state’s requirements.
What’s Covered Through Workers’ Comp Insurance?
Workers’ compensation covers injuries that happen while a worker is on the job. This can come in a few ways.
For example, your worker might be in your warehouse and has something fall on him. The injury from this accident would cover the medical costs associated with the injury.
But you could also have an employee out doing a delivery. Let’s say the worker slips while doing the delivery or is in an accident while doing the delivery. Worker’s comp would cover this worker in these scenarios too. They are still under your employment, even if they are off-site working and therefore would be protected.
Some employees experience illness or injury that is not accident-related. They experience an injury from overuse or repeatedly using the same part of their body to complete their work. This type of work injury would also be covered under workers’ comp insurance too.
Coverage Beyond Medical
You know that when there’s an injury or illness the workers’ comp insurance covers the medical bills. Do you get coverage and protections beyond the initial medical treatments?
Here are some of the additional benefits covered through the insurance policy:
- Hospital care
- Diagnosis and treatments expenses
- Disability payments to the employee while they are unable to work because of the injury
- Rehabilitative care
If the injury would prevent the worker from returning to work in the same capacity as before the injury, the coverage can also offer retraining for a different job. If the injury’s classified as a permanent one, the worker can also be compensated for that injury.
If there was a death on the job, the worker’s comp insurance can give death benefits to survivors beneficiaries as a result of the on the job death.
What Limitations Are There on Coverage?
There are some limitations that come with most workers’ comp policies. There might be caps on coverage for rehabilitation, for example. Some plans also come with deductibles.
If a worker is intoxicated on the job or under the influence of drugs when the accident happens, the policy would not cover the accident.
If an injury is self-inflicted or the result of a fight started by an employee, it would likely not be covered. If the employee is acting in a way that goes against company policies and becomes injured, it would not be covered under a workers’ comp policy.
If an employee sustained an injury while not on the job and the injury impacts their ability to do their job, it would not be covered. The injury has to come from their time while actually working.
Understanding Workers Comp Needs for Your Business
Workers comp insurance provides the small business owner with protection against a huge liability in the event a worker becomes injured or ill while on the job. Most small businesses could never survive the expenses if they had to be responsible for the costs from an injury.
The insurance, though, also protects the worker. They know they’re protected and will be covered in the event something goes wrong at work.
If you’re interested in learning more about your coverage options, we can help. You can get a free online quote or visit our website for lots more information on workers comp insurance plans.