If you’re a business with employees, no matter whether you’re a small startup with just ten members of staff or a larger enterprise with thousands, you will need workers’ compensation insurance. It’s a mandatory part of running your business safely and successfully.
But not to worry. Workers’ compensation insurance is actually a lot simpler than it first seems.
Here’s what you need to know – from what it is to who it protects.
What is Workers’ Compensation Insurance?
Workers’ compensation insurance (AKA workers’ comp) is insurance that protects employees and provides benefits and compensation to workers who suffer an injury or fall whilst at work.
In a nutshell, workers’ comp protects both the employee and you, the business owner. Employees are compensated for medical costs and lost wages while they cannot work, and business owners are protected against litigation.
How Does Workers’ Compensation Insurance Work?
Getting workers’ compensation insurance is mandatory, either privately or through the state. Each state has different rules and regulations regarding workers’ comp, so be sure to check the rules of your governing area.
The cost of worker’s comp depends on your chosen provider and the industry your business is part of. For example, high-risk industries like construction have higher premium rates than let’s say, low-risk industries such as marketing.
What Does Workers’ Compensation Insurance Cover?
Your business’s insurance coverage may differ, but in general, workers’ compensation insurance covers:
- Illness caused by the working environment
- Repetitive motion injury
- Medical treatments
- Lost wages
What If I’m Partially At Fault?
Workers’ compensation insurance provides coverage no matter who is at fault. The only reason why an employee may not be covered is if they are under the influence of drugs and alcohol.
What If I Wasn’t On-Site?
Most workers’ comp insurance will cover employees whether they are on-site or not. The full scope of their duties is covered, including remote working, staying at a hotel for business, and various other circumstances like running errands on behalf of the company or attending a company social event.
Note that employees are not covered when they are legally on break or vacation, even if they are on-site.
How Long Can I Receive Compensation For?
The length of employee benefits and compensation will vary by your insurance provider, the state you operate within, and the circumstances of the injury/illness. But generally, you should expect a maximum window of 7 years. Employees might also still be covered even if they can return to work in some limited capacity.
How Can I Claim?
If you are involved in a work-related injury or illness, it’s important you speak to a lawyer about what compensation you might be entitled to. Always seek advice if you’re unsure.
Likewise, if you’re a new business owner setting up your own company, you must invest in workers’ comp. If you don’t and your employees suffer a work-related injury or illness, you might be liable to litigation against you. Make the right choice!