How Workers’ Compensation Insurance Protects Your Business

Featured image by Jeirden Villegas from Unsplash

There are several ways that workers’ compensation insurance can help protect your business. It doesn’t matter if you own a restaurant, construction company, janitorial business, trucking company, or something related, workers’ compensation insurance works the same and will benefit your company. Workers’ compensation insurance will cover all expenses in the event an employee becomes sick or hurt while on the job. Depending on the risk of your industry and the size of your company, it can be costly, but it is required and necessary.


What Does It Cover?

No matter who is at fault for the injury, workers’ compensation insurance will still apply. Workers’ compensation insurance will cover medical expenses needed as a result of an injury or illness at work or work property. Eligible employees will also be able to receive lost wages as a result of missed workdays. This is usually a lifeline for so many industries, including trucking and hauling, since they won’t be able to work at all following an accident. If death were to occur as a result of an accident, benefits will go to the dependents of the deceased employee.

What Doesn’t It Cover?

Workers’ compensation insurance doesn’t cover self-inflicted injuries. Injuries that do not occur while an employee is at work also will not qualify for a workers’ comp claim. Other instances that will not qualify for workers’ compensation insurance are injuries that are the result of the employee not following proper company protocol, or injuries from the employee committing a crime.

General pain and suffering are not covered under workers’ comp and employees will be unable to recover damages for negligence.


Workers’ Compensation State Requirements

The majority of states do require all employers to have workers’ compensation insurance. There are other states that have certain guidelines that companies must meet in order to be exempt. For example, Colorado has a workers’ compensation requirement that is mandatory as soon as 1 employee is on a company’s payroll. This applies to unpaid interns as well. Other states such as Arizona have coverage options that are readily available for both contractors and subcontractors.

The goal of workers’ compensation insurance is to eliminate the need for any legal interference between employers and employees. Since each state has its own requirements, you will need to check them out on your own. Some states will even give hefty fines to companies that fail to obtain workers’ comp. The best thing to do is to treat your business workers’ comp policy like a benefit to your employees as well as a long-term benefit to your company

Benefits of Workers’ Compensation

When using workers’ comp insurance, employees agree not to sue their employer for negligence. This eliminates any fear of legal action for the employer.  There are some states that have a cap on the amount an employee can recover for a claim. This allows an employer to budget for the potential of a claim.

Employees also have peace of mind knowing that their lost wages and medical expenses will be covered. This gives employees guaranteed protection for injuries and illness. Co-workers are also protected from liability through workers’ comp.

Protect your employees and your company by making sure that you obtain workers’ compensation insurance. You can find insurance companies that offer packages that are tailored to your business. You can get a list of such policies from your insurance company which will discuss both the coverage and risks.