Workers’ Compensation insurance often seems like a product that is just for your employees. It’s just another expense that does nothing to help you, the business owner. However, Workers’ Compensation policies can provide important protections for employers. In fact, they can be an essential part of insuring business success.
What is Workers’ Compensation insurance?
In short, Workers’ Compensation insurance provides protection for employers if an employee suffers a work-related illness or injury.
Workers’ Compensation insurance generally covers a wide range of workplace incidents, including:
- Injuries sustained in a car accident while visiting a client.
- Carpel tunnel syndrome from the repetitive motion of typing.
- Physical injuries caused by lifting and moving heavy objects.
As you can see, Workers’ Compensation coverage can be applied to a wide range of workplaces and occupations.
How Workers’ Compensation insurance benefits employers
For busy business owners, getting Workers’ Compensation insurance may feel like just another item to tick off their to-do list. However, this type of coverage is an important part of creating a safe and successful working environment.
1. It protects you from legal penalties
Having Workers’ Compensation insurance puts you on the right side of the law. Workers’ Compensation policies are mandatory in most states. Small businesses generally need to have coverage in place before hiring their first employee.
The penalty for not having Workers’ Compensation insurance where it is required varies from state to state. However, these penalties tend to be stiff. Common penalties for violating workers’ compensation laws include:
- Stop-work orders: You may be ordered to stop working until you have a policy in place.
- Fines: You are likely to be charged a fine. These typically start at $10,000 and increase depending on the state or if you’ve broken workers’ comp laws multiple times.
- Jail time: Employers may be sentenced to jail time. The sentence length depends on the state and whether workers’ comp violations are considered a misdemeanor or a felony.
It’s always wise to check your local workers’ compensation requirements to make sure your business is properly covered.
2. It protects your business finances
Workers’ Compensation insurance also protects your business’ budget and savings. Sole proprietors and businesses in Texas are generally exempt from workers’ compensation laws. However, without a policy you will be financially responsible for any workplace injuries or illnesses that happen to you or your employees.
The costs associated with workers’ comp claims can be expensive. Your business finances—and possibly even your personal savings—could take a massive hit if you are left to cover these yourself. A Workers’ Compensation policy shields your money by covering:
- Medical bills, including hospital stays and surgeries
- Replacement wages while your employee recovers
- Disability support if they are unable to return to work
- Death benefits for the deceased’s family
Workers’ Compensation insurance helps keep your business running in the event of a workplace injury, illness, or death.
3. It protects you from lawsuits
A Workers’ Compensation policy also protects your finances from costly lawsuits. Employees or their families may sue your business over an injury, illness, or death in the workplace. This is sometimes referred to as employers’ liability insurance, though it is often included in Workers’ Compensation policies.
Lawsuits can be expensive, regardless of whether you are at fault. Defending your business in court can eat away your business savings, and possibly your personal savings as well. Workers’ Compensation insurance protects your finances by covering:
- Legal fees, including hiring an attorney and court costs associated with the lawsuit
- Settlements for lawsuits settled out of court
- Judgements you are ordered to pay after losing a case
A Workers’ Compensation policy can help you avoid the financial impacts of a lawsuit, including bankruptcy or business closure.
4. It reassures your employees
Finally, Workers’ Compensation insurance reassures your staff. This benefit may be harder to measure, but it can be just as important for employers in the long run.
Employees want to feel valued and protected at work. Creating a workplace with a positive culture around safety can help boost employee morale and increase productivity. Your staff can do their job with less worry, knowing that a safety net is in place should things not go to plan.
Having Workers’ Compensation insurance in place communicates to your employees that their wellbeing is important to you. This in turn may create more loyal staff who want to work with you. That means less money spent on hiring and training new staff.
Workers’ Compensation insurance for small business owners
If you’re ready to find Workers’ Compensation insurance for your small business, BizInsure is ready to help. Visit our website to start receiving competitive quotes from some of the country’s top insurers. Simply ‘click or call’ to purchase a Workers’ Compensation policy to help protect your business.
