Business owners are usually familiar with the need for basic insurance coverage such as commercial property insurance, commercial auto insurance, and general liability insurance. Each of these covers a small business in case of an unexpected incident, accident, or legal claim.
However, many owners may not realize the need for workers’ comp insurance for small business. They may be unfamiliar with this type of insurance or may think that they don’t need it because they only have a few employees.
Here is an overview of the basics of workers’ compensation insurance and why it is important to your small business.
What You Need to Know About Workers’ Compensation Insurance for Small Business
What is Workers’ Compensation Insurance?
If you own a small business, it has hopefully grown to a point where you can hire employees to help with operations. These are the workers who handle production at your manufacturing business, help customers at your retail store, or cook food in the kitchen at your restaurant. Your employees work every day to earn a living contributing to your entrepreneurial dream.
But what happens when one of your employees is injured on the job? What happens when a worker at your manufacturing plant is accidently hurt while operating a piece of machinery or a cook at your restaurant is injured in the kitchen?
For starters, your business is without a team member and their responsibilities have to be assumed by someone else. This can have a significant impact on your small business and its ability to serve customers.
But it also means that your employee will be unable to earn wages and will need medical treatment. Workers’ compensation insurance enables your small business to care for injured employees by providing wage replacement and medical care.
Why Do Small Businesses Need Workers’ Comp Insurance?
Without workers’ compensation insurance, your small business could be held liable for the injury sustained by your employee. They could make a claim to recover lost wages and medical expenses that result from being hurt while working for your small business. In the event your small business is held liable, you might face costly financial penalties that could drain your resources.
Worker’s compensation insurance covers your business no matter which party is at fault and limits the right of employees to sue the employer for damages related to their injury.
Is Workers’ Compensation Insurance Required for Small Businesses?
Workers’ compensation is regulated by state governments. Therefore, local laws determine which businesses are required to carry coverage as well as what kind of injuries and medical conditions are covered. Most states require a business to have workers’ compensation insurance once they employ a certain number of workers. Some states require certain types of businesses to carry workers’ comp insurance while others exclude certain types of workers.
Check with your state labor agency to determine if your business is required to have workers’ compensation insurance.
How to Find Workers’ Compensation Insurance for Your Small Business
Where Do I Get Workers’ Comp Insurance for My Small Business?
Workers’ compensation insurance must be obtained separately from other insurance policies you may have in place. Look for an insurance agency with advisors who are knowledgeable about workers’ compensation insurance and how to handle claims.
Can My Small Business Afford Workers’ Comp Insurance?
The cost for workers’ compensation insurance for a small business depends on a number of factors. These include the type of business, the number of employees, and the risks associated with the type of work employees perform on a daily basis. Location and trends in your industry may also factor into the cost of coverage.
Check with an experienced commercial insurance agency to find out about the availability of affordable workers’ compensation insurance for your small business.
ValueOne is dedicated to meeting the needs of small business owners. Contact us or call 855 200-0850 today to find the specific insurance coverage you need to cover your employees and protect your business.