WORKERS COMPENSATION INSURANCE

A Practical Guide for Small Business Owners

Workers compensation insurance is essential for protecting both your employees and your business. It covers medical costs and partial lost wages when employees suffer work-related injuries or illnesses. In addition, it may include rehabilitation expenses and death benefits.

How It Works

Every state enforces unique rules regarding this type of insurance. These laws ensure that injured employees receive benefits, even if their own actions contributed to the accident.

Covered incidents can include injuries from lifting heavy materials, slipping on floors, or exposure to hazardous conditions. However, injuries must directly relate to the employee’s job duties. For instance, playing football on a weekend would not qualify.

Who Needs It?

Most states legally require this insurance for businesses with employees. While some exceptions apply, business owners should always confirm local regulations to avoid fines and legal issues.

Choosing to skip coverage can result in lawsuits, government penalties, and significant out-of-pocket costs. On the other hand, having a policy in place can protect your business from major financial losses.

Additional Protection for Employers

If an injured employee accepts benefits, they usually cannot sue the employer. Still, lawsuits may arise in other situations—especially if an injury falls outside the coverage limits.

Fortunately, most policies include employer’s liability coverage. This helps pay for legal defense, settlements, and court-related expenses in those cases.

What Influences the Cost?

The cost of workers compensation insurance varies by business. Although the average monthly premium in 2020 was moderate, your specific rate depends on:

• Your business location
• Total payroll
• Type of industry
• Previous claims

Therefore, getting a personalized quote is the best way to understand your potential costs.

How much does workers’ comp insurance cost?

In short, it offers vital protection. Not only does it safeguard your employees, but it also helps you maintain compliance and avoid lawsuits. Speak with an independent insurance broker to build the right plan for your business today.