Many small business owners are not sure if they need worker’s compensation insurance. There are certain things every small business owner and/or entrepreneur needs to know about worker’s compensation insurance. Having all the information you need about worker’s compensation is essential.
What Does Worker’s Compensation Insurance Cover?
Worker’s Compensation Insurance covers the cost of related medical bills for the injured employee. These policies also cover the lost wages of an injured employee. They can cover funeral expenses, disability benefits, and the cost of ongoing care.
A worker’s compensation plan can alleviate the financial burdens of a workplace injury for both the employee and the employer. Millions of people each year file worker’s compensation claims in the United States.
Do You Need Workers Compensation? It Depends
Not every small business or entrepreneur will need worker’s compensation insurance. For example, if you are an owner-operator and do not have employees, then, of course, you will not need this type of protection. However, if you have even two employees, you should be considering this type of coverage.
Even in the most mundane, safe environments, there are risks. Slip and fall type injuries account for around 25% of injury claims each year. This means that even in an office setting there is a potential for injury and a resulting claim.
The range of potential work-related injuries is not just physical injuries any longer. About 19% of adults in the United States are dealing with some form of mental illness, which equates to about 47 million Americans. Work-related anxiety and other mental illnesses can be claimed as a worker’s compensation claim.
It May Be Mandatory
Every state in the union has worker’s compensation laws that require an employer to carry this type of liability coverage, except Texas. Texas is the only state that does not require private employers to carry worker’s compensation insurance.
Each state has its own rules as to the size of the company. For example, in some states, the rules are governed by how many employees the small entrepreneur currently employs. In other states, the requirement for worker’s compensation insurance is based on overall revenue and the number of employees.
Check with your state employment office to learn more about mandatory requirements for worker’s compensation insurance. You do not want to be out of compliance if something does happen to an employee.
How Much Can You Afford To Lose?
As an entrepreneur of a small business, you are already facing tremendous odds. The majority of small businesses do not make it to the five-year mark in business because of financial losses and other events.
As an entrepreneur with a small business, protecting your finances should be a priority. Worker’s compensation insurance can help to protect against catastrophic financial losses. A work injury claim without insurance can leave you liable for thousands of dollars.
A workplace injury can mean being responsible for medical treatment, pain and suffering, lost wages, and more. Uninsured employers can be faced with a great deal of financial burden.
Most Employers Find It Worth The Investment
Like any type of insurance, workers’ comp insurance is only truly appreciated when it is needed. With over 119,000,000 individual refunds being made in 2017 alone, most employers agree that this type of policy is essential for any entrepreneur that owns a small business and that has employees. You do not have to have hundreds of employees to realize the value of having this type of plan. All it takes is one employee that is injured at work to really appreciate the value of knowing every cost that is associated with the injury will be covered.