Every small business owner is always looking for ways to maximize profits and lower costs. If you fail to provide your employees with workman’s compensation, you will be liable for any injuries.
You could face stiff financial penalties or even jail time. To learn more about why you need to provide workman’s comp, check out this simple guide!
What Is Worker Compensation Insurance?
Workman’s comp, short for workers’ compensation insurance, provides a vital liability buffer for employers. It also helps keep employees protected. By having a good workman’s comp policy in place, both sides benefit a great deal.
workers’ compensation only applies to injuries that happen as a result of a person’s employment. For example, if you were to slip on the steps of your workplace because the ice was not removed, workman’s comp insurance would apply. If you got into a car accident while driving to work, you would have to look elsewhere for compensation.
If an employee becomes injured at work, a workman’s compensation policy provides money for any medical bills, helps cover any lost wages and other incurred expenses. If the injury is severe or develops into a disability, it ensures that your employees remain covered. An injured employee must be evaluated by a qualified workers compensation doctor to receive any money.
For employers, workman’s comp not only ensures that employees will be taken care of. It also provides an essential legal and financial shield.
In exchange, workers usually give up their right to take legal action against the business where they work. By agreeing to accept a given level of liability, you can protect your business from a ruinous lawsuit for negligence.
Why Does Your Small Business Need Workman’s Comp?
Large businesses and corporations provide workman’s comp to their employees. There are also many small and medium companies that think they don’t need it.
Regulations about workman’s comp vary from state to state. However, most small business owners are required to have policies in place. This rule applies regardless of your industry or the number of employees you have.
A small business just getting off the ground in a one-room office might think they get away with no coverage. You might think that the chances of an accident happening are low, so why bother buying something you don’t need? If you fail to provide workman’s comp coverage, you could be facing fines totaling thousands or even hundreds of thousands of dollars.
Additionally, if you do not have workers’ compensation for your employees, that means that any of them could sue you for negligence. If you don’t have workers’ comp insurance, you are putting your employees, your business, and even yourself at risk.
Individual businesses are exempt from having workman’s compensation insurance, but this can vary depending on the state. For example, most companies in Texas are not required to have workers’ comp. Otherwise, only sole proprietors are exempt, along with family-only companies and those that do not have the minimum number of employees.
Workman’s Comp Insurance Is Not Just Mandatory; It’s Good Business
No one wants to be injured at work or have an employee get hurt. Having workman’s comp insurance helps you and your employees while protecting your business and its assets. Keep browsing our website for more advice and articles like this!