A Guide to Workman’s Comp Insurance

by Startacus Admin

Business based in the States? Here's a guide to Workman’s Comp Insurance...

With the amount of work and capital it takes to start a business, it's incredible that it ever gets done. Every day, energetic, hopeful Americans have an idea on how they can fill a niche in a demanding market, and they hang up a literal or virtual sign and open for business. 

These go-getters write business plans, turn to marketing experts, hire employees, and purchase computer systems. But what steps do they need to take to prepare for the long term? What do these company owners need to do to protect their business, especially once they start making a healthy profit? These business owners should consider workers compensation insurance.

Buying workers’ compensation insurance protects not only your business, but it protects your employees as well. 

How Workers’ Compensation Insurance Protects Employees

Workers’ compensation insurance helps cover employees for work-related illnesses or injuries. It helps cover the costs of the sick or injured employees’ wages and medical expenses, including rehab. If one of your employees dies as the result of an injury incurred at work, workers’ compensation pays death benefits to help cover the funeral expenses. 

How Workers’ Compensation Insurance Protects Your Business

While the monetary benefit certainly goes to the injured worker, workers’ compensation benefits the business owner as well. If a worker is not insured, an injured or ill party may sue the company for compensation. If this happens, the business may find itself in a difficult financial predicament, which may result in the closing of the business.

Another benefit that the business receives by having workers’ compensation insurance is that it keeps the company compliant with state workers’ compensation regulations. 

How Workers’ Compensation Varies from State to State

Workers compensation requirements vary from state to state. Private sector insurance companies can purchase some state's workers' compensation insurance, and other states have state-run agencies that provide coverage.

Most states require that businesses have workers’ compensation insurance except for Texas and New Jersey. Certain types of companies may be exempt from state workers’ compensation requirements, such as real estate salespeople and insurance sales representatives. 

Other aspects of workers’ compensation insurance can vary from state to state. Some states do not require that a business provide workers’ comp for family members who are employees. Other states say that if a company has fewer than five employees, they are not required to purchase the insurance as well.

Types of Injuries Covered by Workers’ Compensation Insurance

Workers’ compensation insurance pays for the result of injuries that happen to employees who are at work or acting on behalf of their employer. Workers’ comp also pays if the employee is injured at work as a result of a natural disaster or workplace violence. 

Sometimes, illnesses are covered by workers’ compensation insurance, but only if the illness was caused as the result of being exposed to something harmful at work.  

Muscle sprains and strains are some of the most common injuries that people receive at work. Falls, slips, and trips are the second largest category of damages. 

Types of Injuries That are Not Covered by Workers’ Compensation Insurance

Workers’ compensation insurance covers not every workplace injury and illness. If an employee receives an injury from an altercation that he or she started, this injury will not be covered by the insurance. Intentional injuries or injuries sustained while the employee was under the influence are not covered as well. Emotional injuries are not usually covered unless they were accompanied by physical trauma. 

Workers’ compensation insurance does not cover injuries that happened while the employee was commuting to or from work. 

Companies Required to Pay for Workers’ Compensation Insurance

Some would assume that workers’ compensation may not be required if a business hires only typical office workers. This is not true. Yes, the workers’ compensation premiums are higher in more dangerous industries, but that does not mean that “safe” workers are excluded from having to be covered.

You may be starting your business small. You may have fewer than five employees. Your state law requires that you only have workers' compensation insurance if you have more than five who are not family members.  

You may be in a regulated industry. Your workers may not be required to lift heavy packages, or there are minimum fall risks.  

It may seem that the whole idea of purchasing workers' compensation insurance seems ludicrous to you. But, if you are planning on growing your company and increasing the number of employees, you need to prepare for this growth as soon as possible.

Article care of the team at Krasno, Krasno & Onwudinjo.

 

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Published on: 3rd August 2019