Did you know that if your business doesn’t carry valid workers compensation insurance, then you could be liable to face criminal prosecution and costly fines, and it could even result in litigation? If your business is small and only has one employee, for example, you must still carry workers compensation insurance for them, even if they are on a temporary contract. However, many employers and business owners are either not aware that state law requires them to carry insurance, or they have found it too costly to purchase in tough economic times.
What are the consequences of a business not carrying workers compensation insurance?
If a worker has an accident while in the workplace – or out in the field depending on their job role – then the consequences for you and your business can be devastating. As an uninsured employer, you may find yourself facing a worker’s compensation claim, and if so, you must act quickly to minimize any adverse consequences that could damage your business.
If your business is facing a compensation claim, what can you do?
The first thing you should do if faced with a claim for compensation as an uninsured employer, is get yourself some professional, legal representation, as failing to carry workers compensation insurance is classed as a criminal misdemeanour and is punishable by a jail term of up to one year, or a fine of up to $10,000. A law firm that specializes in this field would be best, and they can run through your legal options with you. If you don’t seek professional help, you’ll doubtless find the whole situation overwhelming, and it may seem as if you have run out of options. As the employer of a worker who has had an accident at work and filed a compensation claim, you are legally responsible for the payment of all medical bills that may be associated with the accident, and the injured employee can also file a civil lawsuit against you in which you will be presumed negligent and may lose the defence of contributory negligence. The recovery of damages that might lead on from this, could amount to a not insignificant amount.
What is at stake if your business faces a compensation claim without insurance?
The very existence of your business could quite literally be at stake, unless you can successfully negotiate with the employee who has made the claim, governmental agencies and providers of services, to limit the payments and fines.
Not carrying workers compensation insurance is simply not worth the risk, so for more advice on what options are out there for your small business, seek professional help and guidance immediately.